By Jonathan Davies
Lloyds Banking Group has been handed a record £117 million fine for mis-handling complaints over Payment Protection Insurance (PPI).
It comes less than two months after the Financial Conduct Authority (FCA) fined Clydesdale Bank more than £20m for similar reasons.
The fine relates to the way Lloyds handled complaints made over PPI mis-selling. The bank – which is still part-owned by the taxpayer – handled 2.3 million PPI complaints in 2012 and 2013, but the FCA said 37% of those were rejected out of hand.
It is understood that call centre staff were told that the bank’s processes satisfied regulations, and were told to treat complaints on this basis. The FCA said it “a significant number of customer complaints were unfairly rejected”.
Lloyds has said a further £710m aside to cover the costs of PPI complaints. And today’s fine comes as the bank said senior executives responsible for the mis-handling of complaints would forfeit their bonuses.