FSA fine BoS for 'inadequate' controls
The Bank of Scotland has been fined £750,000 by the Financial Services Authority because its PEP/ISA department failed to administer customer funds appropriately.
This, according to the FSA, put 30,000 customers at risk of losing money and exposed BoS to an increased risk of fraud. The problems occurred between November 1999 and August 2001, and meant the bank could not be sure how much money it was holding on behalf of individual customers.
‘The combination of inadequate controls and the lack of staff training were a systemic weakness in Bank of Scotland’s PEP and ISA department,’ said Andrew Procter, director for enforcement at the FSA.
The crux of the problems seem to revolve around the implementation of a new back office IT system. Despite having problems with its old system the BoS implemented the new one in such a way as to ‘let old problems re-occur’.
The Royal Bank of Scotland was fined £750,000 over breaching anti money laundering rules back in December.