Business World

Monday 29 May 2017

Watchdog to fine Lloyds over £100m for PPI failings - sources

Lloyds
Lloyds

Britain's financial regulator will fine Lloyds Banking Group (LLOY.L) more than 100 million pounds for failings in the way it handled complaints about mis-sold loan insurance, sources familiar with the matter said.

Lloyds, which sold more of the policies than other banks in Britain, has so far set aside 12 billion pounds to cover the cost of compensating customers for the mis-selling of the policies, known as payment protection insurance (PPI).

Sky News reported earlier on Thursday that the fine could be announced as early as Friday.

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.

The Financial Conduct Authority said this week that 399 million pounds was paid out by the industry in March to customers who complained about the way they were sold the policies, taking the total amount so far paid out to 19.2 billion pounds.

Banks expect that to rise and have set aside a total of 24 billion pounds to cover the cost, with Lloyds expecting a bill for around half of that.

The regulator fined Lloyds 4.3 million pounds in 2013 for not paying compensation quickly enough to customers wrongly sold insurance on loans and mortgages.

In that case, it found that Lloyds had not paid compensation to 140,000 customers mis-sold PPI within a deadline of 28 days after notifying them they were due a payment.

The FCA also fined Clydesdale Bank 20.7 million pounds for failings in how it handled PPI claims in April this year.

Reuters

Promoted articles

Also in Business