CT Capital has become the latest UK finance company to be fined by the Financial Conduct Authority (FCA) for failures in the way it has handled PPI claims from consumers.
The firm is the parent company of a group of lenders and loan brokers. The FCA issued a £2.36 million fine because it said some consumers had missed out on PPI compensation through mistakes in the way their claims were investigated.
The FCA report into the investigation said CT Capital’s failure to put in place an appropriate complaint handling process for PPI claims meant consumers had missed out on redress payments to which they were entitled with the effect on individual customers being ‘potentially significant.’
The firm were responsible for handling complaints on the 31,591 PPI policies sold by group members between 2005 and 2008, receiving approximately £63 million in commission as a result.
The fine is the latest of 34 handed out by the FCA for failures in PPI claims handling. Last year Clydesdale Bank were fined a record £20.6 million which was eclipsed a few months later with a £117 million fine levied on Lloyds.
CT Capital’s failings were uncovered as part of a thematic review by the former Financial Services Authority (FSA) in 2012.
Treating customers unfairly
FCA director of enforcement and market oversight, said: “Failing to handle complaints appropriately means that firms risk treating customers unfairly for a second time and it’s important that firms get this right.
“We have taken action against firms on numerous occasions and there’s no excuse for firms continuing to get it wrong. We remain determined to ensure that firms put right the harm caused by PPI mis-selling and regain the trust of the public. We will continue to monitor how firms are dealing with complaints and will not hesitate to take action where we see firms not complying with their obligations.”
As a result of the investigation CT Capital reviewed thousands of previously rejected complaints and altered their claims handling procedures
The FCA said the errors were ‘potentially significant’ because the average compensation paid for a successful claim at the time was almost £6,000.
The firm failed to properly train staff in complaint handling procedures and adopted a policy of wrongly rejecting any claim on a policy sold more than six years before the complaint, said the FCA.
Call handlers were also encouraged to dismiss cases, even if the original sales calls were ‘questionable’, on the basis that customers received full details about the policy through the post afterwards.
By January this year the firm had paid out a total of £74 million in redress – £11 million more than the commission it had initially received for the sales of the policies.