The Financial Conduct Authority (FCA) has fined Clydesdale Bank £20.7m for serious failings in handling of Payment Protection Insurance (PPI) claims.
The regulator said that the bank implemented inappropriate policies and provided false information to the Financial Ombudsman Service (FOS) between May 2011 and July 2013.
Documents were altered in a small number of cases to make it look as if Clydesdale held no relevant papers and staff deleted all PPI information from a separate print-out listing the products sold.
The regulator also found that complaint handlers were failing to identify cases where the PPI policy sold was unsuitable for the customer, and found deficiencies in the training and monitoring of complaint handlers.
Clydesdale said it will review all PPI complaints handled prior to August 2014 and offer redress to any customers impacted.
Among the 126,000 PPI complaints decided between May 2011 and July 2013, up to 42,200 may have been rejected unfairly and up to 50,900 may have resulted in inadequate redress, said FCA.
Clydesdale has received the regulator’s standard 30% discount for co-operating with the investigation and settling early. The company will be contacting all affected customers in due course.
The bank’s PPI leadership team or senior management was not aware of these practices.
FCA acting director of enforcement and market oversight Georgina Philippou said: "Clydesdale’s failings were unacceptable and fell well below the standard the FCA expects. The fact that Clydesdale misled the Financial Ombudsman by providing false information about the information it held is particularly serious and this is reflected in the size of the fine.
"We have been very clear about how firms should treat customers who may have been mis-sold PPI. In ignoring documents it held which were relevant to its customers’ complaints, Clydesdale failed to treat its customers fairly."