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The Financial Conduct Authority (FCA) has today fined CT Capital Ltd (CT Capital) £2,360,900 for serious failings in its historic Payment Protection Insurance (PPI) complaint handling processes.

Between May 2011 and November 2013, during which time it handled 6,669 PPI complaints, CT Capital failed to put in place complaint handling processes to deal with PPI complaints appropriately, which resulted in customers missing out on redress payments to which they were entitled. The effect on individual customers was potentially significant: the average redress payment made in respect of a fully upheld complaint during the period was £5,959.

Mark Steward, director of enforcement and market oversight at the FCA said:

“Failing to handle complaints appropriately means that firms risk treating customers unfairly for a second time and it’s important that firms get this right.

“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.”

CT Capital was the parent company of a group of lenders and loan brokers and was responsible for handling PPI complaints on behalf of the group.  Between 2005 and 2008, the group had sold 31,591 regulated PPI policies, receiving approximately £63 million net in commission as a result.

Despite being aware that specific provisions governing the handling of PPI complaints had come into force in December 2010, CT Capital failed to put in place processes designed to follow these provisions until November 2011. 

Even after that time, CT Capital operated flawed policies. In particular, it directed its complaints handlers that failures in the sales telephone calls need not lead to a complaint being upheld if the subsequent sales documentation outlined the matters clearly.  It also failed to provide its complaint handlers with sufficient guidance on how to consider whether sales advisers had taken reasonable care to ensure that the PPI policies they recommended were suitable for the customers.

Until January 2013, CT Capital operated an inappropriate policy in relation to rejecting complaints on the basis of age (time bar) which failed to take into account when a customer may have become aware (or ought reasonably to have become aware) of the cause for complaint.

CT Capital failed to put in place adequate systems for assessing its PPI complaint handling processes and for monitoring the fairness of customer outcomes.  In particular, it failed adequately to analyse decisions of the Financial Ombudsman Service or to use them to inform its ongoing complaint handling processes. 

Following feedback from the FCA in 2013 CT Capital undertook a substantial remediation exercise which involved developing a revised PPI complaint handling process and reviewing approximately 4,800 complaints which had been rejected or in respect of which full redress had not been paid. By January 2016, CT Capital had paid approximately £74 million (including interest) in redress arising from PPI complaints.

CT Capital’s failings were uncovered as part of a thematic review into the handling of PPI complaints in 2012.  The FCA found that CT Capital breached Principles 3 (management and control) and 6 (customers’ interests) of the FCA’s Principles for Businesses. CT Capital agreed to settle at an early stage of the FCA’s investigation and therefore qualified for a 20% (stage 2) discount.  Were it not for this discount, the FCA would have imposed a penalty of £2,951,179 on the firm.

The FCA continues to take the issue of PPI complaints handling seriously. Last year, the FCA fined Clydesdale Bank Plc £20.6 million and theLloyds Banking Group £117 million for failing to handle PPI complaints fairly. The penalty imposed on Lloyds was the largest ever retail fine.

Notes for editors

1. The Final Notice for CT Capital Ltd
2. On 1 April 2013 the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA)
3. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers, to protect and enhance the integrity of the UK financial system and to promote effective competition in the interests of consumers
4. Find out more information about the FCA