UK fines Bank of Scotland for faulty mortgage data

[October 19, 2012]  LONDON (AP) -- Britain's financial regulator has imposed a fine of 4.2 million pounds ($6.75 million) on a unit of Lloyds Banking Group for having inaccurate mortgage records for 250,000 customers.

The Financial Services Authority said Friday that problems at Bank of Scotland between 2004 and 2011 resulted from having two separate unaligned systems which were not always updated.

The FSA said faults were noticed when the bank tried to rectify errors in notifying customers of changes in variable rate mortgages. The agency said some customers who deserved compensation were excluded, while the bank mistakenly paid a total of 20.4 million pounds to over 22,000 ineligible customers.

The bank said all customers who were entitled to goodwill payments had been paid, and it isn't seeking to recoup money from those compensated by mistake.

[Associated Press]

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