Britain’s financial watchdog today said it had fined the state-rescued Lloyds Banking Group ₤4.3 million ($6.6 million, €4.9 million) for delays in compensating customers mis-sold credit insurance.
“The Financial Services Authority (FSA) has fined three Lloyds Banking Group firms a total of ₤4.315 million for failings in their systems and controls that resulted in up to 1,40,000 customers receiving delayed payment protection insurance (PPI) redress,” said a statement.
The three LBG divisions comprise Lloyds TSB Bank Plc, Lloyds TSB Scotland Plc and Bank of Scotland plc.
The FSA said that the affected customers had not been paid within 28 days of receiving notification of agreement to a compensation payout from LBG.
Britain’s beleaguered banks have been forced to pay out vast amounts to compensate clients who were mis-sold cover on credit products — or payment protection insurance (PPI).
In total, the nation’s banking sector has allotted about ₤11 billion to cover PPI payouts, significantly slashing their profits in the process. The PPI covers repayments on credit products such as consumer loans or mortgages.
Separately, the British lenders are also facing a wave of compensation claims for the mis-selling of interest rate hedging products (IRHP) to small businesses.