Bank of Scotland pays Â£17 mln compensation: watchdog
British watchdog, the Financial Services Authority, said on Wednesday it had fined Bank of Scotland and secured £17 million from the lender to compensate "vulnerable" clients over mis-handled complaints.
"The Financial Services Authority has fined Bank of Scotland £3.5 million for the mishandling of complaints about retail investment products -- many from older customers with little or no experience of investment products," the watchdog said in a statement.
The FSA added that it had secured £17 million (19.6 million euros, $27.6 million) in compensation for the bank's customers.
Tracey McDermott, the FSA's acting director of enforcement and financial crime, said the fine of £3.5 million "reflects BoS's serious failure to treat vulnerable customers fairly."
Bank of Scotland is part of Lloyds Banking Group, which was partly nationalised after a British government rescue during the global financial crisis.
The FSA said on Wednesday that between 30 July 2007 and 31 October 2009, Bank of Scotland received 2,592 complaints regarding sales of certain investment products.
"BoS wrongly rejected a significant number of these complaints. An internal review by BoS on a sample of rejected complaints revealed that as many as 45% of the complaints it had handled should have been upheld rather than rejected," it added.
Bank of Scotland apologised for its actions.
"We recognise that on this occasion we have fallen short of the high standards of service our customers should be able to expect of us and we apologise to them for this," said Ray Milne, risk director at BoS.
"We are committed to putting this right and have co-operated fully with the FSA to determine the proper course of action for these customers.
"I would like to assure customers that the issues relate to processes that are no longer used today. We are in the process of contacting affected customers and will pay compensation where it is due," he added in a statement.
© 2011 AFP