The Financial Services Authority (FSA) has slapped a fine of £2.8m on Royal Bank of Scotland (RBS) and its subsidiary NatWest for failing to effectively deal with customer complaints.

FSA said that in its investigations into the way the organizations dealt with grievances led to the conclusion that there was ‘an unacceptably high risk’ that customers had been unfairly treated.

Of the complaint files reviewed by the FSA, 53% showed deficient complaint handling; 62% showed a failure to comply with FSA requirements on timeliness and disclosure of Ombudsman referral rights; and 31% failed to demonstrate fair outcomes for consumers.

The problems were identified as part of an FSA review of RBS’s routine complaint handling between September and December 2009.

FSA managing director of enforcement and financial crime Margaret Cole said that the failure of these two high street banks to deal adequately with complaints put consumers at unacceptable risk and the fine of £2.8m reflects this.

"The review showed that banks need to make major changes to handle consumer complaints fairly and the FSA will continue to take appropriate action to ensure these changes are put in place," Cole said.