Lloyds Banking group hit with record £117m fine for mishandling insurance selling
Lloyds Banking Group has been fined £117m (€160m) for failings in its handling of complaints about the mis-selling of loan insurance between March 2012 and May 2013, in the largest penalty imposed since the £26bn scandal erupted.
Britain's financial regulator have handed out its largest ever fine in a case relating to retail banking and said that Lloyds, which is 19pc owned by the British government, had failed to treat its customers fairly.
The Financial Conduct Authority said Lloyds dismissed customers' personal accounts of what had happened during the PPI sale in some cases or did not fully investigate customers’ complaints. In some instances, Lloyds did not contact customers to enable them to give their account of the sale.
As a result, the FCA said a significant number of claims were unfairly rejected.
Lloyds said that it will reduce bonuses paid to staff by £30m pounds in 2015 in response to the fine. It apologised to customers who had been affected.
Lloyds has already set aside £12bn to compensate customers mis-sold payment protection insurance (PPI) policies.
The policies were meant to protect borrowers in the event of sickness or unemployment but were often sold to customers who did not require them, or who would have been unable to claim.