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Lloyds Banking Group Fined for PPI Delays

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In the latest twist to the payment protection insurance (PPI) claims scandal Lloyds Banking Group, already the biggest contributor to the repayment fund, has been fined over £4million by the Financial Services Authority for delaying repayments to customers. The FSA has stated that more than 140,000 customers had not received their repayments promptly, and Lloyds has become the first lender to be fined for delays. The bank has admitted it ‘did not anticipate’ the sheer number of complaints that it has had to process, and has apologised for the delays in repayments on valid PPI claims.

PPI Payment Should be Prompt

The FSA has decreed that PPI claims payments must be prompt, and Lloyds – along with its subsidiaries – had aimed to pay back all claims within 28 days. The bank had sent letters to almost 600,000 customers informing them that they would be repaid their PPI fees, yet almost 150,000 people had to wait longer than a month to receive the compensation they were due, and almost 10,000 were made to wait over six months without any explanation for the delay.

PPI Payments Human Error

Lloyds has admitted to mistakes and failings in its repayment system, with errors in data input, mis-processing of payments and mislaid cheques among the many admitted mistakes, and the FSA has made a statement on the subject. It says:

“The significant volume of complaints is a product of Lloyds Banking Group’s own failings and the least customers can now expect is that redress, when it is due, will be paid promptly. In short, Lloyds Banking Group’s PPI redress payment systems fell well below the standard the FSA expects, and the size of this fine reflects how seriously we view these breaches.”

PPI Scandal Affects Four Million

The PPI scandal is the worst to have affected the UK banking industry in, some say, its entire history, and the many lenders involved have been forced to allocate over £13billion – so far – to repay the many millions of customers who have been affected by the scandal. It remains to be seen how many people will eventually have been affected by the PPI claims saga, but with four million having already claimed, the number is sure to rise.


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