Clydesdale Bank is said to be taking up to four months to respond to payment protection insurance (PPI) mis-selling claims, twice the statutory time limit, as it re-examines a mountain of claims following intervention by the regulator.
Now the bank has apologised for "delays" in recruiting and training enough new staff to process them.
As The Herald reported last month, the bank has recruited a large number of staff on a 24-hour shift system to process new and previously rejected PPI complaints , after the Financial Conduct Authority ordered a new case handling procedure four months ago.
Despite the Australian bank's urgency in trying to sell the banks through a 2015 flotation, NAB has said that its PPI claims liability "remains uncertain".
Claims experts have said the latest £400m provision could include £100m for staffing costs, which at average payouts of around £3000 could mean the bank expecting to be deluged with 100,000 new and reopened cases.
In October last year The Herald revealed that unlike other major banks Clydesdale was rejecting any claims dating back more than six or seven years, "due to the passage of time", claiming records had been destroyed in accordance with a "data protection principle".
Since August NAB has almost doubled its provisions for PPI claims at its Clydesdale and Yorkshire banks to £811million. It is being required by the FCA to extend its examination of historical records, prompting new claims, higher pay-outs, and a wave of cases being resubmitted by claims companies after previous rejection.
Mike Begg at Dundee-based Beat the Banks said yesterday that under FCA rules, firms were supposed to make a decision on claims within eight weeks. He had around 400 claims awaiting decision, totalling some £1m in value, and around half were "well overdue", with some not having been dealt with after 18 weeks.
Mr Begg admitted he had stepped up the firm's advertising after the bank overhauled its process, prompting a new batch of claims as well as the revival of old ones.
He said: "I phone the bank and no-one is able to tell you anything, it is an absolute shambles."
Richard Caplan, director at Payment Protection Partnership in Paisley, said: "Where we are seeing banks making payments the majority of it is for reviewed cases." The firm had "a significant number of Clydesdale clients" and the bank had been "the most difficult" to deal with.
But he added: "You have to give them credit that they have told us they are now going to do it."
A Clydesdale spokesperson said: "We introduced a new PPI complaint handling process in August in addition to announcing a proactive review of all historic cases. This is a significant undertaking which will ensure consistent and fair review outcomes for all PPI customers. Introducing the new processes and recruiting the fully trained staff required to support this has taken longer to embed than we had hoped and we are sorry for this delay. A plan is in place to respond to cases within the statutory time frame and we will deal with complaints received since August in date order. We are writing to claims management firms this week to update them."
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