RBS and Santander ordered to fix PPI processes – after not sending proper reminders to 1,000s of customers
The Royal Bank of Scotland (RBS) and Santander have been ordered to appoint an independent body to look at their PPI processes after they failed to send, or sent inaccurate, annual PPI reminders to customers.
A legally binding order means that PPI customers should receive an annual reminder from their provider setting out how much they've paid for their policy, what cover they have and their right to cancel.
But RBS failed to provide reminders to almost 11,000 of its customers for up to six years – meaning some customers may not have even been aware they still had PPI. RBS has now written to those affected, providing a reminder of their right to cancel their policy, and it has so far paid out over £1.5 million in refunds to these customers.
Santander meanwhile sent out annual reminders containing incorrect information to over 3,400 of its mortgage PPI customers over a five-year period.
Now the Competition and Markets Authority (CMA) has ordered RBS and Santander to appoint an external body to check they are complying with the PPI rules, and it will have to submit a report on its findings.
It is the second time both banks have been found to be in breach of the PPI rules, with each told to improve their practices in 2016.
Think you were mis-sold PPI? You only have until next week to reclaim – many are owed £1,000s. See our Reclaim PPI for free guide for full help.
What is PPI?
Payment protection insurance, or PPI, is sold alongside loans, cards, overdrafts, mortgages and catalogue accounts to cover repayments if you can't.
There's nothing wrong with it in itself, but banks and building societies massively overcharged and systemically mis-sold it. Billions has been paid out to millions who were mis-sold PPI, but many more are likely to be owed and you now only have days to claim before the 29 August cut-off.
What does the CMA say?
Adam Land, the CMA's senior director of remedies, business and financial analysis, said: "It is unacceptable that some banks aren't providing PPI reminders – or are sending inaccurate ones – eight 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.
"These are serious issues that, in the future, may result in fines if the Government gives us the powers we've asked for. For now, we expect RBS to repay all affected customers quickly, and for both RBS and Santander to make sure that similar breaches do not happen again."
What do the banks say?
A Santander spokesperson said: "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.
"Customers were not financially impacted as a result and would have been aware of their correct mortgage balance through their annual mortgage statement and other communications. We informed the CMA as soon as we became aware of the issue and have taken steps to ensure it does not happen again."
An RBS spokesperson said: "We are contacting those customers who may not have received their annual PPI review letters and have put systems in place to ensure that this does not happen again. We would like to apologise to any customers affected."
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