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Stop bashing bankers? Not just yet, thanks to Clydesdale

Outlook

Jim Armitage
Wednesday 15 April 2015 08:17 BST
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Clydesdale bank staff deliberately sent false information to the ombudsman about such cases, altering computer printouts to make it look like the relevant data had disappeared
Clydesdale bank staff deliberately sent false information to the ombudsman about such cases, altering computer printouts to make it look like the relevant data had disappeared

Just when you thought banker bashing might finally come to an end, another hideous toad crawls out from under a rock to stir the public’s justified indignation yet again.

This time it’s not traders rigging Libor or foreign exchange rates, or investing their own money ahead of their clients, or enabling money laundering and sanctions-busting, but the plain old PPI mis-selling scandal rearing its ugly head again.

It’s wearying to be reading about yet another flagrant abuse of the public by our once-trusted banks. But the goings on at Clydesdale and, perhaps to a greater extent, the Yorkshire Bank sub-brand, are so disgraceful that they demand attention.

The banks’ main crimes were two-fold: first, they refused to examine policies going back more than seven years, claiming the documentation was no longer available when in fact it often was.

Second, and more egregiously, its staff deliberately sent false information to the ombudsman about such cases, altering computer printouts to make it look like the relevant data had disappeared.

The impact was profound – up to 90,000 policyholders who took out PPI products may have either had their compensation claim rejected unfairly or received less redress than they deserved.

And it wasn’t as if management hadn’t been given enough red flags that the PPI department was going horribly wrong. The FCA report found some members of the PPI team had been “escalating” their concerns about the seven-year rule on a number of occasions. For “escalating” read “trying to blow the whistle”.

Clearly, these whistleblowers were ignored, because the message – that Clydesdale was not bothering to look for documents they knew could exist – was never admitted to the ombudsman.

The FCA gives the example of a couple who had taken out a premium PPI costing them £2,800. The couple told the bank in 2011 that they’d been mis-sold but had their complaint rejected “due to the time elapsed”. The case would only be considered if they could supply the relevant paperwork, Clydesdale said.

They complained to the ombudsman but Clydesdale told the watchdog that it “was unable to trace any documentation”.

In fact, it didn’t bother to check.

When the ombudsman insisted the company look again, Clydesdale provided them with a faked screen print making it look like it had no records. The ombudsman had to inform the couple that their case could go no further.

However, the FCA said, Clydesdale did have the copy of the loan agreement in its own files and, as such, should have automatically upheld the complaint. Had the ombudsman been given the correct information, the couple would have probably received compensation of up to £5,100. The bank is now reviewing the complaint, the FCA report says.

Depressing, isn’t it?

Perhaps the one glimmer of light from this whole sordid story is the fact that, on this occasion, the FCA’s checking procedures appear to have worked. Furthermore, you could argue, Clydesdale is being given a huge fine and being forced to review every complaint it handled before last August.

But yet again, our faith in our banks is shattered.

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