UK regulator fines CT Capital for unfair PPI complaint handling

LONDON, June 1 (Reuters) - Britain's financial markets regulator has fined CT Capital, a UK parent company for a group of lenders and loan brokers, 2.4 million pounds ($3.4 million) for "serious failings" in handling complaints about Payment Protection Insurance (PPI).

The Financial Conduct Authority (FCA) said on Wednesday that customers missed out on compensation they were entitled to after CT Capital failed to put in place appropriate processes to deal with 6,669 PPI complaints between May 2011 and November 2013.

Over the last five years, banks have set aside more than 28 billion pounds to meet compensation claims for PPI policies, designed to protect borrowers in case of sickness or unemployment. But policies were often found to have been sold to people who would have been ineligible to claim.

The FCA said CT Capital took almost one year to follow rules about how to handle such complaints and even after 2011, its policies were flawed.

The effect on individual consumers was potentially significant, the regulator said, noting that the average compensation payment at the time was 5,959 pounds.

"Failing to handle complaints appropriately means that firms risk treating customers unfairly for a second time and it's important that firms get this right," said the FCA's head of enforcement, Mark Steward.

An employee for CT Capital in Norwich, eastern England, said the company was not making a comment.

Spurred by FCA "feedback" following a 2012 regulatory review of PPI complaint handling, CT Capital overhauled its processes in 2013, reviewed around 4,800 complaints that had been rejected or not been fully paid out and, by January 2016, had paid around 74 million pounds in PPI compensation and interest.

The FCA last year fined Clydesdale Bank 20.6 million pounds and Lloyds Banking Group (Other OTC: LLOBF - news) 117 million pounds for failing to handle PPI complaints fairly. The penalty imposed on Lloyds was a record retail fine.

($1 = 0.6927 pounds) (Reporting by Kirstin Ridley; Editing by Ruth Pitchford)