Clydesdale Bank is taking up to seven months to respond to complaints about mis-sold payment protection insurance (PPI) despite promising a year ago that it would respond within the statutory two months allowed.

The bank is also accused of blocking PPI complaints from claims firms, months after they were submitted, by last-minute rejection of letters of authority signed by customers.

The overhang of complaint issues comes as the Clydesdale is readied for a flotation early next year with an indemnity of up to £1.7billion from parent National Australia Bank to cover potential misconduct liabilities.

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The Herald revealed in November 2014 that the bank had recruited a large number of employees on a 24-hour shift system to process new and previously rejected PPI complaints following intervention by the Financial Conduct Authority. Last April the bank was fined £21.7m by the FCA for complaint handling defects. The bank said a year ago that a plan had been put in place in August 2014 “to respond to cases within the statutory time frame”.

Glasgow businessman Gordon MacLennan submitted his claim for mis-sold PPI on July 26 this year. Last month however he was told to expect a “final response no later than 29 February 2016”.

Mr MacLennan said: “If the FCA set the deadline what are they doing about the continued failure of the bank to meet it? Personally I feel I now have no choice but to refer my claim to the ombudsman, which obviously creates additional work for everyone involved.”

A spokesman for the FCA said: “Firms have eight weeks to respond to a complaint. A firm that takes longer than this must provide a full explanation for the delay. At this point, the customer is able to take their complaint to the Financial Ombudsman Service.”

Mike Begg, the former Clydesdale banker who runs claims firm Beat the Banks, said almost all his PPI claims included customers’ signatures and ID as required, and validated on receipt, by the bank.

“It is then hard to believe that we are at the very last minute told that our mandate is ‘invalid’, Invariably, this is happening months after a case has been submitted and following a flow of letters from the bank to us advising a final decision is delayed.”

The FCA spokesman said: “We remain vigilant for any new issues that arise concerning firms’ handling of PPI complaints, will act quickly to fully understand them and, where necessary, intervene to make sure consumers get a fair deal.” He could not comment on individual firms.

Meanwhile the NAB Customer Support Group has mobilised the support of 39 MPs in a protest against decisions by the Financial Ombudsman Service on mis-sold hedging loans to its 135 small business members.

John Glare, founder of the NAB Customer Support Group, said most of the £1.7bn set aside by NAB related to the PPI liabilities, and not enough to potential redress for the mis-selling of hedged loans to SMEs. Mr Glare said the bank’s provision for this was based on the “incorrect” assumption that all customers who had been mis-sold the bank’s hedged fixed rate product had in any event wanted a five-year fixed rate loan, so limiting redress to overcharged interest.

“This does not include consequential loss, where the overcharged interest forced customers to sell investment properties in order to keep up with the inflated interest payments,” Mr Glare said. “Many customers’ businesses failed due to the burden of this overcharge.”

Jim McGrory, a St Andrews hotelier, has been battling with the Financial Ombudsman Service for the past three years on this issue, also claiming that the the break fees were legally invalid because there was no counter-party involved. The ombudsman, which has not issued a final judgement in this case, has yet to accept any claim for consequential losses in other cases, citing the high standard of legal proof needed.

A spokesman for Clydesdale Bank said: “The work required to reduce (PPI) backlogs has been well publicised and, while our position is improving, our priority remains ensuring fair outcomes for customers.

“Our procedure for letters of authority (LOA) is there to protect customer confidentiality..... but this does not delay the customer receiving their outcome. “

He went on: “Our provisions are based on a number of factors including the experience of actual redress paid to customers, and do not assume they would all take a five-year fixed rate. We have total cover of £2.1bn across provisions and conduct indemnity, including substantial unutilised provisions of £986m in place to cover legacy conduct costs.”