FSA Fines Lloyds Banking Group for Delayed PPI Payments

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On February 19, the FSA published a final notice announcing that it had fined Lloyds Banking Group (LBG) a total of £4,315,000 for failing to make payment protection insurance (PPI) redress payments promptly. Between May 2011 and March 2012, LBG decided to make redress payments to 582,206 customers, and aimed to make each payment within 28 days of taking the decision to pay. Due to failings in LBG’s systems and controls, however, up to 140,209 of these payments were not made promptly. During its investigation the FSA found that LBG:

  • Neither established an adequate process, nor engaged staff with sufficient experience, for dealing with the very large volumes of PPI redress payments.
  • Did not track PPI redress payments effectively.
  • Failed to monitor effectively whether it was making all payments of PPI redress promptly.
  • Adopted an approach to risk management when preparing redress payments to send to PPI complainants that was ineffective.

The FSA stated that since its investigation LBG has completed a comprehensive review of PPI redress payments to ensure that all customers due PPI redress have been paid the correct amount and compensated for any delay in receiving their payment.

 

Topics:  Financial Services Authority, Fines, Lloyds Banking Group, Payment Protection Insurance

Published In: Consumer Protection Updates, Finance & Banking Updates, Insurance Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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