article: Apology: Clydesdale chief Debbie Crosbie whose rogue staff misled the Financial Ombudsman . A High Street bank has been hit with a record £21million fine after being caught falsifying documents to avoid compensating victims of mis-selling. Now there are calls for criminal charges to be brought over an extraordinary cover-up lasting more than two years at Clydesdale and Yorkshire Banks. Rogue staff misled the Financial Ombudsman – deliberately obstructing its investigation into payment protection insurance complaints. They deleted records and tampered with evidence to make it look like the customer was never sold PPI, or they lied about not being able to trace documents. Politicians called for a police investigation into the wrong-doing, which took place between May 2011 and July 2013. Mark Garnier, a Tory former member of the Treasury committee, said: ‘This all took place well after the financial crisis, when banks said they had changed. Clearly they haven’t. ‘It would be unacceptable if criminal charges are not brought against the people who perpetrated this. An example must be set.’ Labour’s John Mann said those who falsified documents could be guilty of fraud or forgery. ‘The police or the Serious Fraud Office should look at the evidence, because clearly there is a possibility of fraud or forgery which cheated people out of compensation,’ he said. It is a criminal offence under the Forgery and Counterfeiting Act 1981 to falsify documents. Mr Mann added: ‘This behaviour is reprehensible and shows the lengths some banks have been prepared to go to mislead regulators. ‘The police really need to look into this – fines are not enough.’ Clydesdale and Yorkshire Banks are part of the same group and owned by National Australia Bank, with around three million customers and just under 300 branches. Clydesdale holds the banking licence for both in the UK. According to the City watchdog, the worst of the cover-up – which lasted from May 2012 to June 2013 – resulted in up to 42,200 PPI complaints being rejected unfairly and up to 50,900 customers receiving inadequate compensation. In one case a married couple were cheated out of a £5,100 pay-out because the lender lied to the ombudsman that it had not been able to trace records of them having bought PPI. In reality, it never looked for them in the first place. The FCA said the bank had an ‘inappropriate policy’ for its complaints handling in 2011– instructing staff not to search for PPI complaints relating to loans and mortgages that had been repaid more than seven years prior to the complaint. Clydesdale also failed to trawl back through credit card statements dating before 2000 for customers mis-sold PPI alongside a credit card. This resulted in some customers being short-changed on compensation pay-outs, or missing out entirely. But the wrongdoing escalated in May 2012 when a team of staff started to provide false information to the Financial Ombudsman when it was investigating complaints on old PPI policies. This included deleting any reference to PPI on documents related to a customer. Staff also tampered with computer records to make it look like that documentation had been destroyed. This information was then printed out and sent to the Financial Ombudsman. The City watchdog said management at the bank were not aware this was going on. Georgina Philippou, of the Financial Conduct Authority, said: ‘Clydesdale’s failings were unacceptable and fell well below the standard the FCA expects. Fined: The FCA investigation found 'serious failings' in the way Clydesdale handled its PPI complaints . ‘The fact that Clydesdale misled the Financial Ombudsman by providing false information about the information it held is particularly serious and this is reflected in the size of the fine.’ Clydesdale and Yorkshire’s failings were so serious that the £20.7million fine dwarfs the next biggest penalty handed out for PPI, which was £7million imposed on Alliance & Leicester in 2008. The policies were meant to protect customers with loans who lost their jobs or became too sick to work. Labour's John Mann said those who falsified documents could be guilty of fraud or forgery . But they were widely sold to customers who would never have been able to claim – including the elderly and those with existing medical conditions. High street lenders – which made huge profits from selling PPIs – have been forced to set aside £24billion to compensate customers. Clydesdale has so far set aside just over £800million, of which £291million has been paid out – with average settlements of £2,900. But its bill is set to grow as it is forced to revisit 180,000 old cases. The cost of PPI mis-selling is expected to spiral as complaints continue to flood in. Lloyds has racked up a bill of more than £12billion so far – around half the amount put aside by the entire industry. The Financial Ombusdman continues to be swamped by 4,000 complaints a week, but banks complain that claims management firms – which bombard customers with nuisance text messages and phone calls – are driving many people to make bogus PPI complaints. Clydesdale said it had taken disciplinary action against the staff involved. Acting chief executive Debbie Crosbie said: ‘We deeply regret any instance which led to the Financial Ombudsman Service receiving incorrect or incomplete information from us. ‘These practices were not authorised or condoned by the banks. As soon as this issue was discovered, we took immediate steps to stop it; we made the regulator aware and rapidly introduced strict new monitoring procedures.’
highlights: Staff at Clydesdale and Yorkshire Banks misled the Financial Ombudsman .
  They obstructed investigation into PPI complaints by tampering evidence .
  Politicians called for enquiry into wrong-doing between 2011 and 2013 .
  MP John Mann said those who falsified documents could be guilty of fraud .
prediction: staff misled the Financial Ombudsman . 
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