Lloyds fined for failing to make PPI redress payouts on time

 
Tim Wallace
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LLOYDS was yesterday fined £4.3m for failing to compensate 140,000 payment protection insurance (PPI) mis-selling victims promptly, adding to the £5bn already set aside to cover the scandal.

Thousands of those customers had to wait as long as six months for compensation, when it should have taken 28 days, the Financial Services Authority (FSA) said.

The problems from May 2011 and March 2012 also saw 25,000 claims drop out of the process. They were only identified when customers called the bank to complain.

“Lloyds’ PPI redress systems fell well below the standard the FSA expects, and the size of this fine ref lects how seriously we view these breaches,” said the FSA’s Tracey McDermott.

Lloyds blamed the problems on the huge volume of complaints.

“We acknowledge that this led to some customers not being compensated on time and we apologise to those customers whose payments were delayed,” said a spokesperson for the bank.

The problems have since been addressed, with the bank adding interest to all payouts at a rate of eight per cent per year.