The Competition and Markets Authority (CMA) have ordered RBS and Santander to appoint independent auditors to monitor the handling of their PPI cases.
Banks have been required to send out annual PPI reminders since a ruling in 2011. The ruling was a response to the scandal over the mis-selling of PPI that had taken place during previous years.
The CMA said that both RBS and Santander had fallen foul of the rules requiring them to send reminders to their customers. The banks had either sent out inaccurate reminders, or not sent out the reminders at all.
It is the second time the banks have been rapped by the CMA over this issue since 2016.
The UK’s competition watchdog said that almost 11,000 RBS customers had not been sent a reminder by their bank. In some cases, customers had not been sent a reminder for almost six years.
This failure by the banks has meant that many of those affected were not able to decide whether to continue paying for PPI or not.
Every bank is required to contact their customers annually with information on the type of policy they have, how much they’ve paid on their policy so far, and reminding them that they have a right to cancel their PPI policy if they so wish.
Santander was found to have sent reminds to all of its customers, but in some cases they had sent our inaccurate PPI information. This had affected some 3,400 customers between 2012 and 2017.
Both Santander and RBS have been forced to appoint auditors to oversee the process, and must report back to the CMA with updates on their progress.
Back in 2016 both banks received warnings from the CMA for not complying with the rules regarding PPI information. Barclays and LLoyds also fell foul of the rules in 2018 and were instructed to tighten up their handling of PPI.
The CMA is in the process of seeking the right to impose the necessary fines on banks and companies directly - a power it does not currently have.
Adam Land, the CMA’s senior director of remedies, business and financial analysis, said: “These are serious issues that, in the future, may result in fines if the government gives us the powers we’ve asked for.
“It is unacceptable that some banks aren’t providing PPI reminders — or are sending inaccurate ones — 8 years after our order came into force. The legally binding directions we’ve issued today will make sure that both RBS and Santander now play by the rules.”
A spokesperson for Santander assured customers that they had not been ‘financially impacted’ by the bank’s shortcomings, and that the necessary actions had been taken to prevent such an issue recurring:
“We’re sorry that as part of a communication about their PPI policies, a small number of customers who were in arrears received incorrect information on their mortgage balance.”
RBS has had to pay out over £1.5m in refunds and has written to those customers affected reminding them of their right to cancel.
A report has said that adverts for sports utility vehicles...
Tonik Energy has launched a smart energy tariff that separates...
The Met Office’s annual climate report shows that the impact...
The £2 billion programme to upgrade the UK’s inefficient housing...