Lloyds Group fined £4.3 million for delays in PPI compensation

Simon Ward
by Lovemoney Staff Simon Ward on 19 February 2013  |  Comments 6 comments

The Financial Services Authority has fined the banking group for missing its 28-day deadline for payouts to over 140,000 people.

Lloyds Group fined £4.3 million for delays in PPI compensation

The Financial Services Authority (FSA) has fined Lloyds Banking Group over £4.3 million for delays in paying out compensation to customers who were mis-sold Payment Protection Insurance (PPI).

The FSA says that, between May 2011 and March 2012, Lloyds sent out over 582,000 letters to claimants saying it would pay them compensation.

Over 140,000 customers didn't receive a payout within the 28-day timeframe stipulated under FSA rules.

Instead, 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. Incredibly, nearly 25,000 customers’ payments fell out of the process altogether.

The FSA also says that, when customers called Lloyds to find out what had happened to their payments, staff were unable to fast-track the payment, tell them when the payment would be made or even explain why it had been delayed.

What an FSA investigation revealed

An investigation by the FSA found widespread problems with Lloyds’ processes, including poor planning, staff without sufficient knowledge to manage the process, ineffective tracking and a lack of overall management responsibility.

We highlighted Lloyds TSB, which is part of the wider Lloyds Banking Group, as one company that had received consistent complaints about delays last April. The bank told us then it was putting processes in place to ensure customers’ payouts weren’t overdue. The FSA cited "media attention" as one of the reasons why it investigated the Lloyds group.

The FSA says Lloyds has now settled backdated claims and has paid interest equivalent to 8% a year to those who had to wait. If you've been waiting for longer than 28 days, let us know via the Comments box below.

By last December, a total of £8.4 billion had been paid out in overall PPI compensation since January 2011.

Banks and building societies have set aside more than £13 billion in compensation for people who were mis-sold PPI. The Lloyds Group alone has set aside £5.3 billion.

Last month, the banks asked the FSA to impose a deadline of April 2014 for people to claim PPI compensation. It has not yet responded to the request.

If you think you have a valid claim, read How to claim your PPI compensation. Avoid fee-charging claims management companies as they'll take up to 25% of any payout you receive.

More on insurance

What's better than PPI?

The true cost of not shopping around for car and home insurance

25 ways to cut your car insurance

Health policies: cover and exclusions

Make a successful claim on your critical illness insurance

Enjoyed this? Show it some love

Twitter
General

Comments (6)

  • ambahall
    Love rating 21
    ambahall said

    Recalcitrant, inefficient or just plain dishonest banks being fined 4.3 million sounds great.

    And where, exactly, does that money go? Presumably not back to the people who have been "inconvenienced". To the Government? Or to finance the FSA? (same thing)

    Where DO all these huge "fines" go - I would love to know!!

    Report on 19 February 2013  |  Love thisLove  0 loves
  • purplesanj
    Love rating 0
    purplesanj said

    Hmmm? Who's the majority stakeholder in Lloyds? The taxpayer!

    Fined £4.3 million for delays in PPI compensation for conning hard working taxpayers, a fine which is being paid out of? Taxpayers' money!

    Which is going where... certainly NOT to the taxpayer!!!

    It's all just one BIG con! We call third world countries corrupt... just look closer to home!

    Btw, my PPI Claim with Lloyds has been outstanding since July 2011, I have been given the runaround from pillar to post and still no result!

    Report on 19 February 2013  |  Love thisLove  0 loves
  • PoohBah
    Love rating 23
    PoohBah said

    Not trying to make any excuses for them, but I don't suppose the flood of dubious claims made through the PPI refund shyster outfits has helped Lloyds (or any of the others) keep to their timetables.

    Report on 19 February 2013  |  Love thisLove  0 loves
  • bengilda
    Love rating 100
    bengilda said

    There seems to be a lot, and I mean lot, of rather incompetent management at all levels. Right from the top there appears to be little effort to ensure compliance. Personally I consider that the fine should be recovered from underperforming executives in the form of cancelled bonuses, pay reductions and, in worst cases, instant dismissal.

    Report on 19 February 2013  |  Love thisLove  0 loves
  • amwell44
    Love rating 77
    amwell44 said

    The money is paid into the Consolidated Fund, so shareholders, in effect, who include all taxpayers in this case, are paying in to the same account their taxes get paid into.

    It's not very efficient and FSA should be considering fining individuals. A few forced sales of second homes and yachts of executives would encourage the others, remembering the arm twisting that went on to get people to sign up for outrageously overpriced PPI, which they were not obliged to accept.

    Report on 20 February 2013  |  Love thisLove  0 loves
  • dollyc
    Love rating 0
    dollyc said

    Lloyds group is not the only one late in compensation payments. We have accepted the Financial Ombudsman's final decision against HSBC issued in March 2012. Todate we have not received a calculation based on that decision. This is in connection to a PPI claim and a missold pension plan. Its now March 2013 a whole YEAR since the final decision. HSBC claims FOS is responsible for the calculation since Oct 2012.

    Does anyone have any advice?

    Report on 03 March 2013  |  Love thisLove  0 loves

Post a comment

Sign in or register to post a reply.

Our top deals

Credit card
company
Balance transfers rate and period Representative
APR
Apply
now

Barclaycard 31Mth Platinum Visa

0% for 31 months (2.99% fee) Representative 18.9% APR (variable) Apply
Representative example: Assumed borrowing of £1,200 for 1 year, at a Purchase Rate of 18.9% (variable), representative 18.9% APR (variable). Credit available subject to status. A Balance Transfer fee of 3.5% will be applied, then reduced to 2.99% by a refund (terms and conditions apply). Plus an additional £20 fee refund on balance transfers over £2000.

Barclaycard 30Mth Platinum Visa

0% for 30 months (2.89% fee) Representative 18.9% APR (variable) Apply
Representative example: Assumed borrowing of £1,200 for 1 year, at a Purchase Rate of 18.9% (variable), representative 18.9% APR (variable). Credit available subject to status. A Balance Transfer fee of 3.5% will be applied, then reduced to 2.89% by a refund (terms and conditions apply). Plus an additional £20 fee refund on balance transfers over £2000.

MBNA 30Mth Platinum Credit Card Visa

0% for 30 months (2.89% fee) Representative 18.9% APR (variable) Apply
Representative example: Assumed borrowing of £1,200 for 1 year, at a Purchase Rate of 18.9% (variable), representative 18.9% APR (variable). Credit available subject to status.
W3C  Thank you for using Lock, Stock and Two Smoking Barrels