Regulator fines CT Capital for 'serious failings' on PPI complaints

It wasn't until 2013 – a year after failures first came to light – that CT Capital revised its PPI complaints handling policy and reviewed 4,800 complaints regarding claims it had previously rejected or not paid out in full.

By January this year it had paid out about £74 million in compensation (including interest) to affected customers after a Financial Conduct Authority (FCA) investigation in 2012 found that the company had failed to deal properly with PPI complaints. The FCA then slapped it with a £2,360,900 fine this week for these past failings.

CT Capital is a parent company of lenders and brokers that sold more than 30,000 PPI policies to customers between 2005 and 2008, earning £63 million in pre-tax commission.

Find out more about PPI, whether you have it and how to reclaim it for free in our guide.

What's all this about?

PPI is a type of insurance designed to cover credit card and loan repayments if you become injured, sick or unemployed.

It's not an inherently bad product, but it's been mis-sold to millions of people in the UK in recent years, leading to them being owed billions in compensation.

In 2010 new rules came into force to govern how PPI complaints were handled, but CT Capital did not follow them until November 2011.

Even after that time it broke FCA rules by misdirecting its staff to reject legitimate complaints.

What were these later failings?

• CT Capital told its complaints handlers that failures when selling PPI over the phone wasn't grounds for a complaint if subsequent documents given to the customer were clearer about the product.

• Until January 2013 it unfairly rejected complaints on the basis of the age of the claim; complaints relating to PPI products sold more than six years previously were refused.

• It didn't put adequate complaints handling procedures in place and failed to properly monitor the fairness of its decisions.

What happened next?

The failures first came to light in 2012, and the following year it revised its PPI complaints handling policy and reviewed 4,800 complaints regarding claims it had rejected or not paid out in full.

By January this year it had paid out about £74 million in compensation (including interest) to affected customers as a result of this review.

CT Capital had its fine, issued this week, cut by 20% after agreeing to settle during the early stages of the FCA investigation. Had it not done so, its full fine would have been almost £3 million.

Asked why the fine was issued this week, given its investigation started in 2012, an FCA spokesperson said: "Our enforcement investigations can take time".

And when asked to clarify when exactly was the early stage at which CT Capital settled, the spokesperson added: "I'm afraid I can't comment on when the firm settled".

Who's been caught out for mis-selling PPI?

Last year, the FCA fined Clydesdale Bank almost £20.7 million and the Lloyds Banking Group £117 million for failing to handle PPI complaints fairly. Lloyds' fine was the largest ever imposed on a retail bank by the FCA.

What does the FCA say?

Mark Steward, director of enforcement and market oversight at the FCA, says: "Failing to handle complaints appropriately means that firms risk treating customers unfairly for a second time.

"We have taken action against firms on numerous occasions and there's no excuse for firms continuing to get it wrong. We remain determined to ensure that firms put right the harm caused by PPI mis-selling and regain the trust of the public. We will continue to monitor how firms are dealing with complaints and will not hesitate to take action where we see firms not complying with their obligations."