Release Date: 1st June 2016

To access the original FCA document, click here.

Summary

The Financial Conduct Authority (FCA) has fined CT Capital Ltd £2,360,900 for significant failures in handling Payment Protection Insurance (PPI) complaints. These failings occurred between May 2011 and November 2013 and affected 6,669 PPI complaints, resulting in many customers not receiving the redress payments they were entitled to. The average redress for fully upheld complaints during this period was £5,959.

Summary of the Incident:

• Company and Duration: CT Capital Ltd, responsible for handling PPI complaints for its group, failed to implement proper complaint handling processes from May 2011 to November 2013.
• Key Failings: CT Capital did not adhere to specific provisions for handling PPI complaints until November 2011 and continued to operate flawed policies even after that. Key issues included:
  • Directing complaints handlers to dismiss failures in sales calls if subsequent documentation was clear.
  • Providing inadequate guidance to handlers on assessing the suitability of PPI policies.
  • Implementing an inappropriate time-bar policy that did not consider when customers became aware of the cause for complaint.
• Regulatory Breach: CT Capital breached Principles 3 (management and control) and 6 (customers’ interests) of the FCA’s Principles for Businesses.
• Redress and Remediation: After feedback from the FCA in 2013, CT Capital revised its PPI complaint handling process and reviewed 4,800 previously rejected or under-compensated complaints, paying approximately £74 million in redress by January 2016.

Key Takeaways for Other Firms:

• Ensure Compliance: Implement and maintain robust complaint handling processes that comply with regulatory requirements.
• Provide Clear Guidance: Ensure complaint handlers receive adequate training and clear guidelines to assess complaints accurately and fairly.
• Monitor and Review: Regularly review and monitor complaint handling processes and outcomes, using feedback from the Financial Ombudsman Service to inform improvements.
• Timely Implementation: Act promptly to implement any regulatory provisions or feedback to avoid ongoing non-compliance.

Conclusion:

The FCA’s action against CT Capital Ltd underscores the importance of adhering to regulatory requirements in complaint handling. Firms must ensure that their processes are robust, fair, and in line with the standards to avoid significant penalties and ensure fair treatment of customers.