View the article online at http://citywire.co.uk/wealth-manager/article/a659910
Lloyds says sorry after £4.3m fine for PPI failings
by Sarah Miloudi on Feb 19, 2013 at 10:18
Lloyds has apologised after the Financial Services Authority (FSA) issued fines totalling £4,315,000 to three of its firms for failings in their systems and controls which delayed payment protection insurance (PPI) compensation.
Up to 140,000 customers were affected by the failings, and Lloyds said that since these came to light it has beefed up its systems.
'We acknowledge this led to some customers not being compensated on time and we apologise to those customers whose payments were delayed,' the bank said.
'All customers who were due redress during the review period have now been paid in full.'
The FSA found the following five failings at three Lloyds Banking Group firms:
1. Lloyds' firms failed to establish an adequate process for preparing redress payments to send to PPI complainants, including a lack of planning and its systems were unable to process the huge volumes of PPI redress payments it needed to;
2. Staff did not have the knowledge and experience to ensure the process worked properly;
3. There was ineffective tracking of PPI redress payments, and until 9 March 2012, there was no control at all for the reconciliation of PPI redress payments;
4. Lloyds' firms failed to monitor effectively whether it was making all PPI payments promptly and did not gather sufficient management information to enable it to identify, in a timely manner, the full nature and extent of the payments failings; and
5. Firms' approach to risk management when preparing redress payments was found to be ineffective.
News sponsored by:
Ian McVeigh and Steve Davies, managers of Jupiter's UK Growth fund, talk about their predictions for the UK equity space. Click here to watch a series of sponsored interviews with Jupiter's fund managers on the UK equity market.