The FSA has fined RBS and NatWest a total of £2.8m for customer complaint failings after finding the banks responded inadequately to more than half the gripes it reviewed.
The banks received more than 5,000 complaints combined in the first six months of last year, according to FOS data, mostly relating to 'banking and credit' and 'general insurance' matters.
According to the FSA, there was an unacceptably high risk that customers may not have been treated fairly due to a number of failings within the banks' approach to routine complaint handling, including:
- delays in responding to customers;
- poor quality investigations into complaints, with complaint handlers failing to obtain and consider all the appropriate information when making their decision;
- issuing correspondence that failed to fully address all of the concerns raised by customers and failed to explain why complaints had been upheld or rejected; and
- customers not receiving their FOS referral rights within the appropriate time period.
Of the complaint files reviewed by the FSA, 53% showed deficient complaint handling; 62% showed a failure to comply with FSA requirements on timeliness and disclosure of Ombudsman referral rights; and 31% failed to demonstrate fair outcomes for consumers.
Margaret Cole, the FSA's managing director of enforcement and financial crime, says: "We expect firms to treat customers fairly and that consumers can be confident their complaints will be dealt with properly.
"The failure of these two high street banks to deal adequately with complaints put consumers at unacceptable risk and the fine of £2.8m reflects this."
Cole says an FSA review showed banks need to make major changes to handle consumer complaints fairly.
The firms agreed to settle at an early stage in the investigation and therefore qualify for a 30% reduction in penalty. Were it not for this discount the FSA would have sought to impose a financial penalty of £4m on the firms.
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