Capita won a £325m 10-year deal to manage mortgage processing operations for the bank’s three mortgage brands in November last year. However, despite claiming to have carried out some work for Co-op, Capita said that the firm has not been paid for its services.
As a result, according to the Telegraph, Capita’s chief executive Andy Parker warned yesterday there was “a high degree of risk” of litigation with Co-op bank over the contract to administer mortgages.
He added: “Everything is ready to go and the client is refusing to sign off for one reason only – if they sign off, they have to pay us. We’re still hitting targets and delivering for this bank.”
However responding today, Co-op denied that it has failed to pay, instead suggesting that Capita is not holding up its side of the deal.
“The bank strongly refutes Capita’s suggestion that they have delivered an element of the transformation programme which the bank has not paid for,” it said in a statement. “In addition, there are amounts which the bank regards as owing to it by Capita.”
It added that it is continuing to “work through” the problems with the programme and remained committed to operating its mortgage processing in a satisfactory manner.