Imro forces RBS to pay fines and compensation of £400,000

Royal Bank of Scotland has been forced by the industry regulator Imro to pay more than £400,000 in fines and compensation for mismanaging Personal Equity Plans (PEPs) held by 4,000 customers.

Royal Bank of Scotland has been forced by the industry regulator Imro to pay more than £400,000 in fines and compensation for mismanaging Personal Equity Plans (PEPs) held by 4,000 customers.

RBS has to pay £100,000 in fines. It is also paying £250,000 compensation to customers. RBS also has to pay Imro's £60,000 investigation costs.

Customers have been compensated for the wrong level of dividend and incorrect level of tax relief RBS distributed in the course of managing PEPs since February 1998. They have received about £60 each.

Coutts, now part of RBSGroup, was found guilty of a similar lapse in PEP management last month and had to pay out a £50,000 fine and £225,000 in compensation to customers.

As well as mismanaging PEPs, the most recent fine imposed on RBS related to lapses in checking funds it estimated it held compared to the actual amount it was holding.

Imro said yesterday RBS had not made the necessary checks every six months, as required under the global custody regulation that governs financial institutions.

A spokesman for RBS said yesterday: "The problems related to the time we installed a new computer system in February 1998 and we have now sorted out the problems and paid compensation the affected customers."

RBS was fined £290,000 by Imro in 1998 when it acted as a trustee for two Morgan Grenfell funds.