* Inaccurate records were held for 250,000 customers
* 20.4 mln stg wrongly paid out in goodwill payments
LONDON, Oct 19 (Reuters) - Britain's financial regulator has
fined Bank of Scotland (BoS) 4.2 million pounds ($6.8 million)
for failures in its systems which meant it held inaccurate
mortgage records for 250,000 of its customers.
The Financial Services Authority (FSA) said on Friday that
BoS, now part of Lloyds Banking Group, relied on
incorrect records for considerable periods of time between 2004
and 2011.
"These mistakes stemmed from the fact that Bank of Scotland
had an inadequate mortgage records system meaning they could not
identify which of those 250,000 customers were subject to a cap
on their standard variable rate," said Tracy McDermott, FSA
director of enforcement and financial crime.
The FSA said that, while monitoring a consumer website, it
found a number of customers complaining they had been wrongly
excluded from having a cap on their standard variable mortgage
rate and had not received subsequent goodwill payments.
The problem was compounded when more than 22,000 mortgage
holders who should not have been included in the programme were
mistakenly awarded goodwill payments totalling 20.4 million
pounds.
These customers would not have to return the payments, a
spokesman for the bank said.
BoS has apologised to its customers and cooperated fully
with the regulator, a company statement said on Friday.
If the bank had not agreed to settle with the FSA at an
early stage of the investigation, the fine would have been 6
million pounds, the FSA said.
