Royal Bank of Scotland (RBS) and National Westminster Bank (NatWest) have been fined £2.8million by the Financial Services Authority (FSA) for multiple failings in their handling of customer complaints.

More than half of the complaints reviewed by the FSA were deemed to have been responded to inadequately by the banks.

The investigation found an unacceptably high risk that customers may not have been treated fairly due to failings within the banks’ approach to routine complaint handling, including delays in responding to customers, poor quality investigations into complaints, the issuance of correspondence that failed to fully address all of the concerns raised by customers and failed to explain why they had been upheld or rejected, and customers did not receive their Financial Ombudsman Service referral rights within the appropriate time period.

Fifty-three per cent of the reviewed complaint files showed deficient complaint handling, 62 per cent showed a failure to comply with FSA requirements on timeliness and disclosure of Ombudsman referral rights, and 31 per cent failed to demonstrate fair outcomes for consumers.

The banks were also found not to have given complaint handling staff adequate training and guidance on how to properly investigate a complaint, the monitoring of handling in branches was ineffective, and the banks also failed to ensure that complaint handlers properly reviewed complaints taking account of all relevant factors.

“We expect firms to treat customers fairly and that consumers can be confident that their complaints will be dealt with properly,” commented Margaret Cole, the FSA’s managing director of enforcement and financial crime. “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.

“The poor complaints procedure of RBS and NatWest came to light during our review of complaint handling in major banks. The review showed that banks need to make major changes to handle consumer complaints fairly and the FSA will continue to take appropriate action to ensure these changes are put in place.”

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