Lloyds fined £4.3mn over PPI claims delay
Bank blamed for delaying 140,000 claims
By CFOWorld.co.uk staff | CFO UK | Published 14:51, 19 February 13
Lloyds Banking Group has been fined £4.3 million by the Financial Services Authority (FSA) for delaying compensation payments to customers over Payment Protection Insurance (PPI) mis-selling.
In a statement on Tuesday, the FSA said failings in the bank's claims processing systems and controls resulted in nearly 140,000 customers experiencing delays in receiving compensation for PPI mis-selling.
The regulatory watchdog said that between May 2011 and March 2012, the bank failed to pay compensation to some customers within the required deadline of 28 days following a decision on payment entitlement.
Giving details the FSA said around 87,000 had not received a payment within 45 days, with 8,800 having to wait over six months. The FSA also found that around 25,000 claims inadvertently "dropped out of the process" and were only identified because customers chased payments.
In response Lloyds claimed it had not anticipated the number of complaints it received and made "administrative errors".
"We acknowledge that this led to some customers not being compensated on time and we apologise to those customers whose payments were delayed," the bank said.
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