Lloyds fined $6.6m for PPI redress delays

20 February 2013

Lloyds Banking Group has been fined £4.31 million ($6.6 million) for systems failures that resulted in up to 140,000 customers experiencing delays in their payment protection insurance (PPI) redress.

The Financial Services Authority (FSA) confirmed yesterday (19 February) that three divisions of the major British financier - Lloyds TSB, Lloyds TSB Scotland and Bank of Scotland - had been guilty of not dealing with such action promptly enough.

Rules set out by the regulator call on banks to ensure PPI claims are finalized as quickly as possible and, with this in mind, Lloyds aimed to pay out damages to the 582,206 individuals it sent decision letters to between May 2011 and March last year within 28 days.

However, the FSA established that less than a quarter of claimants received their redress in this timeframe.

Tracey McDermott, director of enforcement and financial crime at FSA, commented: "In short, Lloyds' PPI redress payment systems fell well below the standard the FSA expects."

By Gary Cooper

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