Lloyds Banking Group has been fined a record £117 million by the Financial Conduct Authority (FCA), for its mishandling of Payment Protection Insurance complaints.
Only two months ago, Clydesdale Bank was fined £20.7 million for similar shortcomings.
The fine is the latest to be levied on Lloyds Bank. The bank was fined £218 million in 2014 by both the FCA and US regulators, for playing a part in the rigging of international lending rates.
The Lloyds Banking Group is part owned by the state with British taxpayers holding a 19 per cent stake, but the government has said recently that it will sell its shares to the public within the next twelve months.
According to the FCA, the bank dealt with 2.3 million complaints between March 2012 and March 2013, regarding the mis-selling of PPI. Lloyds immediately rejected 37 per cent of these. Call centre staff were told by the bank that it had not breached regulations when selling PPI and, consequently, said the FCA, a number of valid complaints were wrongly rejected.
Undercover investigation
The Bank’s unfair rejection of complaints came to light following an investigation by journalists from The Times.
Bonuses cut
Lloyds has already announced that its executives will be forfeiting a total of £2.65 million in bonuses over the affair. Chief executive, Antonio Horta-Osorio, stands to lose £350,000 alone from his bonus.
It is not only the executives who will lose money, however. Lloyds has cut £30 million from its entire group bonus fund. An employee who wished to remain anonymous told the BBC that the bank was punishing all its staff for the behaviour of its executives.
Customers who have been unfairly treated by the Bank will be compensated. Lloyds has put aside £710 million for those customers who are entitled to redress for mishandled complaints regarding the selling of PPI.
For a typical loan of £30,000.00 over 120 months with a variable interest rate of 19.56% per annum, your monthly repayments would be £598.34.
Including a Product Fee of £2,400.00 (8% of the loan amount) and a Lending Fee of £807.00, the total amount repayable is £71,800.20.
Annual Interest Rates ranging from 11.88% to 29.38% (variable). Maximum 50.00% APRC. The loan must be paid back by your 70th birthday. Read more.
