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Royal Bank fined over handling of customer complaints
The Royal Bank of Scotland group was yesterday fined £2.8m by the Financial Services Authority for inadequate handling of customers' service complaints.
RBS and its NatWest subsidiary were found guilty of delays, shoddy investigations and inadequate explanations to more than 50% of customers who complained during the last quarter of 2009. The banks received 1.1m complaints in the course of that year.
The fine was reduced from £4m because RBS, which acknowledged its complaints handling had been poor, co-operated with the investigation.
On an investigation of the major banks' performance in dealng with complaints, the FSA found problems with more than half of the sample that it examined at RBS and NatWest.
It said the banks had failed to establish a system to monitor the quality of complaints. In 62% of cases they failed to comply with rules on giving information on the Financial Ombudsman Service, and in 31% they failed to demonstrate fair outcomes for customers.
The FSA blamed poor training and guidance for staff dealing with complaints, and inadequate monitoring of their work by managers.
Margaret Cole, the FSA's managing director of enforcement, said: "The failure of these two high street banks to deal adequately with complaints put consumers at unacceptable risk, and the fine of £2.8m reflects this."
RBS said that internal reviews had uncovered shortcomings in the system and it was committed to putting them right.
Last year the FSA proposed additional rules to underpin complaints procedures, including stipulating that banks identify a senior manager responsible for complaints handling, and putting in remedies for common complaints.