#$181

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Lloyds Bank Fined $181 Million Over PPI Claims

By

Ian Walker and

Max Colchester

June 5, 2015 2:28 a.m. ET

LONDON— Lloyds Banking Group LYG -1.64 % PLC has been fined £117 million ($ 181.06 million) by the British regulator for its handling of Payment Protection Insurance sale complaints, and said it will cut the group’s executive bonus pool by £30 million.

Lloyds added that unvested bonuses of around £2.65 million will be forfeited. It froze the release of shares due under the deferred bonus pool from 2012 to 2013 pending the result of the investigation by the Financial Conduct Authority.

The FCA probed how the bank managed third-party groups who were hired to deal with complaints from customers who were sold PPI, according to regulatory filings. PPI was widely sold alongside an assortment of financial products, including loans and credit cards, to cover customers’ repayments should they fall sick or lose their job.

Since 2000 Lloyds sold an estimated 16 million such policies. The bank estimates it has settled around 45% of the polices sold since then, according to its annual report. So far the bank has set aside more than £12 billion to compensate customers. In 2013 the U.K. regulator fined the bank for delaying compensation payments for people sold PPI.

“We accept the FCA’s findings and apologize to those customers who were impacted,” Chairman Lord Blackwell said. “Since 2011 the group has made significant progress to strengthen the business. We are trying to get it right for our customers and to rebuild trust,” he said.

Friday’s fine is large in part because of the sheer number of mishandled complaints, one person familiar with the matter told The Wall Street Journal.

Last month National Australia Bank Ltd NABZY -5.01 % ’s U.K. unit, Clydesdale, was fined £20.7 million over how it dealt with customer complaints over PPI. At the time it was the largest fine yet imposed by the U.K. regulator relating to PPI.

The FCA is currently reviewing whether a final deadline should be imposed on when customers can seek PPI compensation. A decision is expected this summer, according to one person familiar with the matter.

New Post has been published on http://www.newsfrombanks.com/lloyds-bank-fined-181-million-over-ppi-claims.html

Lloyds Bank fined $181 million over PPI claims

LONDON– Lloyds Banking Group PLC has been fined GBP117 million ($ 181.06 million) by the British regulator for its handling of Payment Protection Insurance sale complaints, and said it will cut the group’s executive bonus pool by GBP30 million.

Lloyds added that unvested bonuses of around GBP2.65 million will be forfeited. It froze the release of shares due under the deferred bonus pool from 2012 to 2013 pending the result of the investigation by the Financial Conduct Authority.

The FCA probed how the bank managed third-party groups who were hired to deal with complaints from customers who were sold PPI, according to regulatory filings. PPI was widely sold alongside an assortment of financial products, including loans and credit cards, to cover customers’ repayments should they fall sick or lose their job.

Since 2000 Lloyds sold an estimated 16 million such policies. The bank estimates it has settled around 45% of the polices sold since then, according to its annual report. So far the bank has set aside more than GBP12 billion to compensate customers. In 2013 the U.K. regulator fined the bank for delaying compensation payments for people sold PPI.

“We accept the FCA’s findings and apologize to those customers who were impacted,” Chairman Lord Blackwell said. “Since 2011 the group has made significant progress to strengthen the business. We are trying to get it right for our customers and to rebuild trust,” he said.

Friday’s fine is large in part because of the sheer number of mishandled complaints, one person familiar with the matter told The Wall Street Journal.

Last month National Australia Bank Ltd’s U.K. unit, Clydesdale, was fined GBP20.7 million over how it dealt with customer complaints over PPI. At the time it was the largest fine yet imposed by the U.K. regulator relating to PPI.

The FCA is currently reviewing whether a final deadline should be imposed on when customers can seek PPI compensation. A decision is expected this summer, according to one person familiar with the matter.

Write to Ian Walker at [email protected] and Max Colchester at [email protected]

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