Friday, October 19 12:32:54
Britain's financial regulator has fined Bank of Scotland (BoS) 4.2 million pounds for failures in its systems which meant it held inaccurate mortgage records for 250,000 of its customers.
The Financial Services Authority (FSA) said on Friday that BoS, now part of Lloyds Banking Group, relied on incorrect records for considerable periods of time between 2004 and 2011.
"These mistakes stemmed from the fact that Bank of Scotland had an inadequate mortgage records system meaning they could not identify which of those 250,000 customers were subject to a cap on their standard variable rate," said Tracy McDermott, FSA director of enforcement and financial crime.
The FSA said that, while monitoring a consumer website, it found a number of customers complaining they had been wrongly excluded from having a cap on their standard variable mortgage rate and had not received subsequent goodwill payments.
The problem was compounded when more than 22,000 mortgage holders who should not have been included in the programme were mistakenly awarded goodwill payments totalling 20.4 million pounds.
These customers would not have to return the payments, a spokesman for the bank said.
BoS has apologised to its customers and cooperated fully with the regulator, a company statement said on Friday.
If the bank had not agreed to settle with the FSA at an early stage of the investigation, the fine would have been 6 million pounds, the FSA said.