If bankers have been dismayed in recent years at watching their profession fall in public esteem then the Clydesdale Bank's recent behaviour will have them squirming in discomfort.
After it was fined £8.9m last week by the Financial Conduct Authority (FCA) for unfairly treating 22,000 mortgage customers, and coming alongside its continuing refusal to review its "embedded swap" loans to thousands of small businesses despite criticism from customers, campaigners, MPs and MSPs, it has emerged that the bank has done away with customer records going back more than seven years, potentially reducing its compensation bill for mis-selling payment protection insurance (PPI).
The bank stresses that it has "a clear policy" of retaining customers' documents for a minimum of seven years from the date an account is closed or a customer stops using a service. Concern has been expressed that destroying older records might make it impossible to judge whether a customer is due PPI compensation.
Other banks, subject to the same data protection laws, have apparently retained their records going back much further. Does such a policy not clash with the bank's stated responsibility to provide a fair PPI complaint- handling process unconstrained by time period?
And why has it been able to produce some or all records going back 12 or more years for certain customers, but none for others?
If it has only partial records for some customers, then what does that say about its record-keeping overall?
The bank has said it is in the process of reviewing its PPI complaint handling policy, including the matter of how long records are kept for: good. What if customers have had their records destroyed already, however? What chance is there of any due compensation for them?
The wider concern for the Clydesdale is that controversy is becoming a habit. Last month, the Financial Ombudsman Service upheld a hotelier's complaint over the mis-selling of an "embedded swap" loan.
The ongoing review by the FCA of mis-sold interest rate hedging products does not cover these "fixed rate tailored business loans (TBLs)" sold in large numbers by Clydesdale; nevertheless, the FCA's chief executive recently admitted fixed rate TBLs were "not significantly different from swaps".
Clydesdale Bank, however, is resisting calls for a formal review of the loans, which customers say were foisted upon them with no explanation of the potentially huge breakage fees.
Clydesdale Bank emerged relatively unscathed from the credit crunch when other banks were roasted over their casino-style banking.
That reputation, however, will not survive the onslaught of many more angry customers. Compensation payments might be expensive, but the value of a good reputation cannot be quantified.
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