This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.bbc.co.uk/go/rss/int/news/-/news/business-13541860

The article has changed 7 times. There is an RSS feed of changes available.

Version 2 Version 3
Bank of Scotland fined over complaints errors by FSA Bank of Scotland fined over complaints errors by FSA
(about 1 hour later)
Customers of the Bank of Scotland are expected to receive £17m in compensation following mishandling of complaints about investment products.Customers of the Bank of Scotland are expected to receive £17m in compensation following mishandling of complaints about investment products.
The Financial Services Authority (FSA) has fined the bank £3.5m after it found that many complaints were rejected when they should have been upheld.The Financial Services Authority (FSA) has fined the bank £3.5m after it found that many complaints were rejected when they should have been upheld.
Policies were often sold to older customers with little knowledge of investing.Policies were often sold to older customers with little knowledge of investing.
The bank has apologised and will review thousands of cases.The bank has apologised and will review thousands of cases.
FailuresFailures
The bank has agreed to review 8,614 rejected complaints relating to investment advice given from February 2004 to the end of 2009.The bank has agreed to review 8,614 rejected complaints relating to investment advice given from February 2004 to the end of 2009.
The typical investment during this period was between £20,000 and £30,000.The typical investment during this period was between £20,000 and £30,000.
The review is expected to lead to compensation payments of more than £17m, with £2.4m already having been paid out by the bank.The review is expected to lead to compensation payments of more than £17m, with £2.4m already having been paid out by the bank.
This was triggered because the Financial Ombudsman Service received appeals from investors who argued that their complaints had been rejected wrongly.This was triggered because the Financial Ombudsman Service received appeals from investors who argued that their complaints had been rejected wrongly.
This led to an investigation into 2,592 complaints about five different investment policies between July 2007 and October 2009.This led to an investigation into 2,592 complaints about five different investment policies between July 2007 and October 2009.
They were the Bank of Scotland's Collective Investment Plan, the Personal Investment Plan, the Guaranteed Growth Bond, the ISA Investor and the Guaranteed Investment Plan - all of which are no longer sold.They were the Bank of Scotland's Collective Investment Plan, the Personal Investment Plan, the Guaranteed Growth Bond, the ISA Investor and the Guaranteed Investment Plan - all of which are no longer sold.
The FSA said that an internal review by the bank found that 45% of these complaints should have been upheld rather than rejected.The FSA said that an internal review by the bank found that 45% of these complaints should have been upheld rather than rejected.
VulnerableVulnerable
Following its initial review, the bank has decided, in 45% of such cases, to overturn the original decision and to uphold the complaint instead.Following its initial review, the bank has decided, in 45% of such cases, to overturn the original decision and to uphold the complaint instead.
Of these, 77% were complaints made by inexperienced customers and 55% were from those aged over 60.Of these, 77% were complaints made by inexperienced customers and 55% were from those aged over 60.
"This fine reflects the Bank of Scotland's serious failure to treat vulnerable customers fairly," said Tracey McDermott, the FSA's acting director of enforcement and financial crime."This fine reflects the Bank of Scotland's serious failure to treat vulnerable customers fairly," said Tracey McDermott, the FSA's acting director of enforcement and financial crime.
"The firm's failure to ensure it had a robust complaint handling process in place led to a significant number of complaints being rejected when they should have been upheld.""The firm's failure to ensure it had a robust complaint handling process in place led to a significant number of complaints being rejected when they should have been upheld."
Ray Milne, risk director at Bank of Scotland, said: "We recognise that on this occasion we have fallen short of the high standards of service our customers should be able to expect of us and we apologise to them for this. We are committed to putting this right.Ray Milne, risk director at Bank of Scotland, said: "We recognise that on this occasion we have fallen short of the high standards of service our customers should be able to expect of us and we apologise to them for this. We are committed to putting this right.
"I would like to assure customers that the issues relate to processes that are no longer used today. We are in the process of contacting affected customers and will pay compensation where it is due.""I would like to assure customers that the issues relate to processes that are no longer used today. We are in the process of contacting affected customers and will pay compensation where it is due."
Speaking to the BBC, Mr Milne explained that in rejecting the original complaints, the bank's staff had not spoken to the customers.Speaking to the BBC, Mr Milne explained that in rejecting the original complaints, the bank's staff had not spoken to the customers.
In order to justify the sale, the staff had simply checked to see that customers had been given the appropriate paperwork when the investments were sold.In order to justify the sale, the staff had simply checked to see that customers had been given the appropriate paperwork when the investments were sold.
"Frankly, we were relying too much on the documents handed over at the end of the sale, and not actually looking at the overall nature of the customer's complaint," he said."Frankly, we were relying too much on the documents handed over at the end of the sale, and not actually looking at the overall nature of the customer's complaint," he said.
"It simply was not good enough," he said."It simply was not good enough," he said.
The customers whose complaints had previously been rejected did not need to do anything. If the review now upheld their complaint, they would be compensated automatically by the end of July.The customers whose complaints had previously been rejected did not need to do anything. If the review now upheld their complaint, they would be compensated automatically by the end of July.
That would apply to inheritors if the customers had died, he added.That would apply to inheritors if the customers had died, he added.
Extra checksExtra checks
Paperwork relating to a further group of nearly 7,903 Halifax and Bank of Scotland investment customers is also being examined.Paperwork relating to a further group of nearly 7,903 Halifax and Bank of Scotland investment customers is also being examined.
The bank had realised that the records for some of the customers, who were initially assessed as being cautious about investments, did not properly record why the sale had in fact gone ahead.The bank had realised that the records for some of the customers, who were initially assessed as being cautious about investments, did not properly record why the sale had in fact gone ahead.
Mr Milne said he was confident they had not in fact been mis-sold their investments.Mr Milne said he was confident they had not in fact been mis-sold their investments.
"We will contact them to see if the sale was appropriate - if not, we will compensate them," he said."We will contact them to see if the sale was appropriate - if not, we will compensate them," he said.
Have you filed a complaint with the Bank of Scotland? Do you feel that it was dealt with unfairly? Send us your comments using the form below.