UK’s Financial Conduct Authority (FCA) has imposed £117m fine against Lloyds Bank, Bank of Scotland and Black Horse (together Lloyds) for treating their customers unfairly when handling payment protection insurance (PPI) complaints between March 2012 and May 2013.


According to FCA, during the relevant period Lloyds evaluated customer complaints relating to around 2.3 million PPI policies and rejected 37% of those complaints.

In March 2012, Lloyds released guidance instructing complaint handlers that the overriding principle when evaluating complaints was that Lloyds’ PPI sales processes were compliant and robust unless told otherwise.

Lloyds also did not notify complaint handlers of known failings identified in its PPI sales processes during the relevant period.

Some complaint handlers depended on the overriding principle to dismiss customers’ personal accounts of what had happened during the PPI sale or to not fully investigate customers’ complaints, while in some cases, Lloyds did not contact customers to enable them to give their account of the sale, said FCA.

A significant number of customer complaints have been unfairly rejected, as a result of Lloyds’ misconduct, according to FCA.

FCA enforcement and market oversight acting director Georgina Philippou said: "The size of the fine today reflects the fact that so many complaints were mishandled by Lloyds.

"Customers who had already been treated unfairly once by being mis-sold PPI were treated unfairly a second time and denied the redress they were owed. Lloyds’ conduct was unacceptable."

Lloyds qualified for a 30% discount, as it agreed to settle at an early stage of the investigation, otherwise the fine would be around £167m.

Image: A rebranded Lloyds Bank branch in Wetherby, West Yorkshire. Photo: courtesy of Mtaylor848.