Britain’s financial regulator found that the bank was into the practice of holding inaccurate records since 2004, which stopped in 2011, when some customers complained about confusing information about changes in their mortgage contracts, particularly pertaining to the standard variable rate.
Due to such a practice, a lot of customers were incorrectly excluded from the program and did not receive goodwill payments, claims the market watchdog.
In another instance, BOS incorrectly contacted 33,700 customers who should never have been included in the program, and made goodwill payments totaling £20.4m to 22,700 of them.
During the seven year period, the bank fed data in two separate unaligned systems, and could not update the information at regular intervals, claims the market watchdog.
FSA director of enforcement and financial crime Tracey McDermott said, "There was no structure in place to identify errors as they occurred and no checking procedures thereafter."
Charged with violation of Principle Three of the FSA’s Principles for Business, the lender has agreed to settle the same at an early stage, which might have reached £6m, if the bank had not co-operated at the earliest.
