UK watchdog orders RBS, Santander to fix ‘breaches’

Bloomberg

Royal Bank of Scotland Group Plc (RBS) and Banco Santander SA were ordered to appoint an independent auditor for their claim processes after issuing inaccurate information, or failing to send reminders altogether, about the insurance policies that turned into the costliest scandal in UK banking.
The banks had previously been ordered to send yearly reminders, including how much customers paid for payment protection insurance, following a probe in 2011 by the UK’s Competition and Markets Authority.
“It is unacceptable that some banks aren’t providing PPI reminders — or are sending inaccurate ones — eight years after our order came into force,” Adam Land, the CMA’s senior director of remedies, business and financial analysis, said in a statement Friday. It’s not the first breach by either of the two banks, the CMA said.
PPI policies, some of which dated back decades, were intended to cover missed debt repayments and were often sold using aggressive tactics. In the worst cases, banks misled customers by telling them that PPI was mandatory for loans. RBS has made provisions totaling about 5.3 billion pounds so far for the scandal.
The CMA said Santander violated the order “by sending out annual reminders containing incorrect information to over 3,400 of its mortgage PPI customers from 2012–2017,” while RBS “failed to provide reminders to almost 11,000 of its customers for up to 6 years.” According to the CMA, RBS has now contacted those affected and has so far paid out over 1.5 million pounds in refunds.
RBS is contacting customers who may not have received their annual PPI review letters, and has put systems in place to prevent a recurrence, a bank spokeswoman said.
August 29 is the deadline to make new PPI claims, and more than eight years into the scandal, its repercussions are still tripping up the banks. Lloyds Banking Group Plc said in July that it took an unexpectedly large extra charge for a last-minute rush of PPI calls.