Co-op fined after putting PPI claims on hold
Friday 04 January 2013
The City watchdog has fined the Co-operative Bank £113,300 for failing to handle complaints regarding payment protection insurance (PPI) properly.
The Financial Services Authority said the Co-op incorrectly put on hold complaints over the mis-selling of the loan insurance during an unsuccessful High Court challenge by the British Bankers Association to FSA measures designed to ensure PPI complaints were dealt with fairly.
The Co-op stopped dealing with the cases despite the FSA making it clear to the industry in a letter dated 21 January 2011 that claims should be progressed normally while the legal action was ongoing, the FSA said yesterday. It added that it was likely the Co-op unfairly put on hold a significant proportion of 1,629 complaints between 21 January and 9 May that year.
"While nobody suffered any financial loss, the Co-op's actions meant that a significant number of people had the resolution of their valid complaints delayed for no good reason. We will continue to take action where we find PPI customers have not been treated fairly," the FSA said.
PPI was meant to protect borrowers who lost their jobs because of sickness or redundancy but was often sold to customers who would have been ineligible to make a claim.
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