Clydesdale Bank customers who made a Payment Protection Insurance (PPI) claim to it before August 2014 will have their complaints reviewed after the firm has been found guilty of a number of "serious" failings.

The Financial Conduct Authority (FCA) has today slapped both Clydesdale Bank and its sister bank Yorkshire Bank, with a combined £20.6 million fine – the largest of its kind – for PPI complaints handling errors made between May 2011 and July 2013.

The regulator found these failings, which included providing false information about complaints to the Financial Ombudsman Service, means that of the 126,600 PPI complaints Clydesdale made a decision on between these dates, up to 42,200 may have been rejected unfairly.

The FCA says up to 50,900 upheld complaints may also have resulted in customers receiving inadequate redress for customers. As a result Clydesdale is reviewing all PPI complaints it handled before August 2014 – when it announced it was subject to an enforcement process with the FCA relating to this issue.

The FCA's findings are particularly significant as Clydesdale's failings occurred after April 2011, which is when the High Court ruled that it was unfair to place cases on hold and providers had to follow a list of rules to proactively find and compensate consumers who were mis-sold.

See our Reclaim PPI for free guide, which includes free template letters to claim £1,000s back.

'Fine proves idea all banks play nicey after the test case is a fallacy'

Martin Lewis, founder and editor of, says: "This fine proves that the idea that all banks played nicey nicey after the test case is a fallacy.

"We've known for a while that banks vacillate in their attitude towards PPI – sometimes with a 'let's just get this off the books and pay' while at other times they clench their financial buttocks tightly.

"This behaviour by Clydesdale is a disgrace but I'm not convinced this is an isolated incident. We continue to see a range of banks and lenders rejecting claims they know the Ombudsman will uphold, then using high falluting legalese in the hopes people won't take it further.

"The PPI battle is far from over. There are many billions of pounds still to be paid out to people who had their money wrongly taken off them often by lying or deceit and this should be a clarion call for everybody to check if they are owed. 

"With problems like this materialising years later – this is further proof of why the banks should not be allowed to impose a time bar on reclaiming."

So what exactly did Clydesdale do wrong?

The FCA says Clydesdale made the following errors:

  • It implemented inappropriate policies, which meant its PPI complaint handlers were not taking into account all relevant documents when deciding how to deal with complaints.

  • It provided false information to the Financial Ombudsman Service in response to requests for evidence of the records it held on PPI policies sold to individual customers.

  • A team within Clydesdale's PPI complaint handling operation altered a "small number" of system print outs to make it look as if it had no relevant documents and deleted all PPI information from a separate print out listing products sold to a customer. The FCA adds that these practices were not known to or authorised by Clydesdale's PPI leadership team or senior management.

  • Complaint handlers failed to identify cases where the PPI policy sold was unsuitable for the customer, and the FCA found that there were deficiencies in the training and monitoring of complaint handlers.

  • Complaints handlers would not search for documents about loans, mortgages and credit cards which had been repaid more than seven years before the date of the complaint. However in a small number of cases, these documents had not been destroyed and were still available.

Georgina Philippou, acting director of enforcement and market oversight at the FCA says: "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."

I'm a Clydesdale/Yorkshire Bank PPI customer. What happens now?

Complaint made before August 2014?

Clydesdale says it will review all PPI complaints – including those already adjudicated on by the Financial Ombudsman Service or at County Court level – it handled before August 2014. This is the date it announced it was subject to an enforcement process with the FCA relating to this matter.

It says redress will be offered to customers impacted by these failings. Clydesdale adds that it won't be reclaiming cash if it finds it actually repaid customers too much.

The review process begins in June and is expected to take approximately 18 months. Clydesdale says all cases will be opened automatically – customers don't need to do anything – and it will also notify all customers of the outcome of their review.

It says it will contact you, but if you've not heard from it in the next few weeks, you can call Clydesdale's customer service team on 0844 736 2616 and Yorkshire Bank customers can call 08447 368 368. There's no point calling now as no further information will be available from call handlers and Clydesdale says ultimately it will slow down the process for everyone else.

'We got this wrong and I'm sorry for that'

Acting chief executive, Debbie Crosbie, says: "In 2011 we introduced changes to our policies and procedures that were designed to help us respond to PPI complaints. A number of these changes were inappropriate and have disadvantaged some of our customers. We got this wrong and I am sorry for that.

"We deeply regret any instance which led to the Financial Ombudsman Service receiving incorrect or incomplete information from us. These practices were not authorised or condoned by the Banks.

"As soon as this issue was discovered, we took immediate steps to stop it; we made the regulator aware and rapidly introduced strict new monitoring procedures to prevent any recurrence."

Other banks fined for PPI failings

Clydesdale and Yorkshire banks are not the only providers, which have been fined by the regulator over PPI complaints failures:

  • In February 2013 Lloyds Banking Group was fined £4.3 million by the city watchdog for massive delays in paying back mis-sold PPI after MoneySavingExpert first revealed the plight of victims (see the Lloyds fined £4.3 million over PPI delays MSE News story).

  • In January 2013 The Co-op was fined £113,300 by the regulator for unfairly putting complaints on hold (see the Co-op fined for delaying PPI complaints MSE News story).

  • And In August 2014, the FCA revealed that bank and credit card providers would reopen two and a half million old PPI complaints after unfairly rejecting or underpaying victims (see the Two and a half million PPI complaints to be reopened MSE News story).