The Financial Conduct Authority, FCA, imposed obligations on the UK banks to pay 1.3 billion pounds ($2.04 billion) as compensation payments to clients, as the banks are accused of frauds with bank cards insurance and stealing personal data, according the watchdog’ s statement published on August 22. The Financial Conduct Authority ordered the UK banks to pay 1.3 billion pounds ($2.04 billion) as compensation to their clients. The FCA accuses banks of frauds involving bank cards insurance and stealing personal data, watchdog’ s statement said on August 22.
The compensations will be paid by 13 leading UK financial institutions. Barclays, Lloyds Banking Group, HSBC Holdings, and Royal Bank of Scotland are among them. The amount of contributions of each institution is not revealed. About 7 million people suffered from illegal actions taken by the UK credit establishments. The program of measures is to be adopted by the Supreme Court of the United Kingdom. The Wall Street Journal estimates that the first payment will be made only in spring 2014.
The government made a complaint about the way the banks and CPP Group insurance company acted; activating bank cards, the bank’s clients were advised to purchase insurance provided by CPP Group, however, its terms were not clarified. Consequently, the clients had to spend up to 80 pounds a year for insurance risk, which according to FCA’s statement were ‘considerably exaggerated’. In November 2012, CPP Group was fined 10.5 million pounds for illegal means of selling their services. Recently, the UK banks have been repeatedly forced to pay the UK and US governments fines and compensations. Manipulations of interbank lending LIBOR and payment insurance, Payment Protection Insurance, PPI, are the most commonly-known scandals. The losses of the UK financial institutions exceed 15 billion pounds.
