Lloyds TSB fined £4.3 million for delaying PPI compensation

Lloyds TSB have been fined for systems and controls failings that led up 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.”

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