Yahoo Finance Barclays faces competition watchdog action over PPI failures
The UK’s competition watchdog has taken legal action against Barclays after the bank failed to remind PPI customers about their policies for a second time.
Under competition rules, banks are supposed to remind customers every year setting out how much they have paid in for payment protection insurance, and notifying them of their right to cancel the policy.
In the period from October 2016 to October 2017, Barclays failed to provide a reminder to 2,265 Littlewoods credit card PPI customers, the Competition and Markets Authority (CMA) said.
The lender attributed the breach to a technical problem in transferring the customers to its computer system.
Barclays previously failed to provide annual reminders for almost 10,000 PPI customers in 2015.
The CMA said on Monday that it had issued legal directions to Barclays, requiring it to put appropriate systems and procedures in place to prevent a similar incident from happening again in the future.
Adam Land, a senior director at the CMA, said: “The annual reminder is an important measure so customers know they still have a PPI policy and how much it is costing them each year, as well as their right to cancel or switch.
“This is Barclays’ second breach of the PPI order. As a result, we are issuing legal directions which can be enforced by a court, to ensure they comply with the order.
“We now require assurances from Barclays they have now put adequate systems in place to prevent a similar breach from occurring again.”
The CMA does not currently have the power to impose financial penalties for breaches of this kind, however, it has called for such powers “in order to increase incentives for businesses to comply with market and merger remedies and to rectify any breaches quickly”.
A Barclays spokesperson said: “Between October 2016 and October 2017 a small number of PPI customers were not sent the annual review statements which they were entitled to receive.
“This issue has now been resolved and all customers have received their missing statements. We have written to all affected customers to apologise unreservedly and to outline how we will recompense them where they would have otherwise cancelled their policy.
"We take this matter extremely seriously and have conducted an internal investigation to ensure all stringent controls and policies continue to be upheld."
The bank last week reported that profits had tumbled 29 per cent, due in part to £400m worth of PPI charges in the first half of the year.
