Yorkshire Bank fined £100,000 for PEP pay-out delays

Yorkshire Bank has been fined £100,000 by the investment regulator, Imro, for delays in paying out funds to half of its Personal Equity Plan (PEP) customers.

Yorkshire Bank has been fined £100,000 by the investment regulator, Imro, for delays in paying out funds to half of its Personal Equity Plan (PEP) customers.

Yorkshire has also paid £94,000 in compensation to customers who did not receive dividends on time and whose funds where not paid promptly when their PEPs were closed down.

Imro, which began an investigation of Yorkshire last March, said the breach of rules concerned the bank's "failure to complete customer asset reconciliations, failure to keep proper records and failures in internal organisation and control".

The fines over handling PEPs follow similar problems at Royal Bank of Scotland in September. Yorkshire, which no longer manages PEPs, said the problems arose when it was transferring customers to alternative managers. PEPs are a tax-free investment vehicle, replaced in April last year by Individual Savings Accounts (ISAs).

A spokesperson for Yorkshire said: "This was particularly painful because we are a regional bank and have a good customer relations record. All we can say is we have apologised and that it was us who spotted the problem and called the regulators in."

Yorkshire has 2.7 million customers. Of 3,314 PEP customers, 1,857 were found to be affected by the problems and 1,643 were paid compensation. Around 200 customers were accidentally overpaid by the bank and have not been asked to return the extra funds.