Lloyds TSB fined £4.3 million for delaying PPI compensation
Lloyds TSB have been fined for systems and controls failings that led uo to 140,000 customers not receiving their compensation in the set timelines.
FSA rules state redress must be paid promptly and Lloyds aimed to make payment within 28 days of the decision letters. In a large number of circumstances this was not met.
Up to 140,209 customers – nearly a quarter – received payment after 28 days. Around 87,000 customers had to wait over 45 days, 56,000 over 60 days, 29,000 over 90 days and 8,800 over six months. Of the total, 24,589 payments dropped out of the process, and some were only identified after customers called to chase outstanding redress payments or went to the media to highlight their case.
Lloyds who have had very large volumes of PPI claims did not plan for the payments and the banks systems were unable to cope.
Lloyds was also unable to fast-track redress to PPI customers after they called to chase this with the bank. The FSA also says there was ineffective tracking of redress payments and Lloyd’s approach to risk management when preparing the payments was also ineffective.
Lloyds appear to continue to struggle with the level of complaints they are receving and if you have been mis sold your ppi by Lloyds then we would suggest making your claim as soon as possible.
FSA director of enforcement and financial crime Tracey McDermott says: “The industry let customers down badly in relation to the sale of PPI. The significant volume of complaints is a product of Lloyds’ own failings and the least customers can now expect is that redress, when it is due, will be paid promptly.
“In short, Lloyds’ PPI redress payment systems fell well below the standard the FSA expects, and the size of this fine reflects how seriously we view these breaches.”
In order to make your claim please complete our online form or call us on 01244 683222.
Lloyds TSB has been accused of wrongly rejecting genuine claims for mis selling payment protection insurance.
Compensation is only being awarded to between 15% and 35%in figures seen by representatives of moneysaving expert. The bank, which has set aside £4.3 billion to pay claims, appears to be rejecting claims despite customers having genuine claims.
However, the bank’s own data shows in the first half of the year its Lloyds TSB brand sided with consumers in a much higher 81% of complaints about insurance, of which PPI made up a large percentage. Its sister brand Halifax upheld 74% of insurance complaints in that period.
The change of tact appears to show a hardening resolve to reject claims, despite the bank saying sorry in June 2011 for widespread PPI mis-selling over the past few years.
When complaints are then taken to the independent Financial Ombudsman Service, it sides with claimants in 98% of cases against Lloyds TSB and 90% against sister brands Bank of Scotland and Halifax, according to latest figures.
Where the Ombudsman awards compensation, it usually comes after a firm wrongly rejects an initial complaint.
One claims management firm told MoneySavingExpert.com that Lloyds Banking Group had been awarding compensation to approximately 80% of its clients at the start of the year. But this figure had dropped to 20% in August.
Another unconnected firm says the uphold rate for its clients is now at about 35% where the claim is against Lloyds TSB, and 15% against Halifax.
It would appear that despite Lloyds accepted the wrongdoing it is not sticking to it’s obligations to compensate customers.
They have employed call centre’s abroad to deal with the calls and a number of customers have complained that it is clear the operator does not understand the process or the information the customer is giving them.
The latest tactic appears to be to speak to the client to pressure them by asking for unrealistic documentation. For example a copy of an employment contract from 10 years ago.
A Financial Services Authority spokesman says: “We keep a very close eye on how firms handle complaints to ensure customers are treated fairly.”
Latest Lloyds PPI storm
This is the latest storm to engulf the bank over the way it handles PPI claims.
Not content with flogging a product that was worthless to hundreds of thousands of customers, it made some claimants wait over 90 days once they have agreed to compensate the client.
As long well wrongly rejecting claims, Lloyds TSB has also been accused of failing to provide information in time for the Ombudsman to investigate claims.
When this happens, it usually results in a win for consumers.
How to reclaim your ppi
If you believe you have been mis sold your ppi policy then simply complete our online form or call us on 01244 683222 using your free mobile minutes or on freephone 0800 612 4136.