Lloyds 'under investigation by FCA for PPI complaints handling'

05 August 2013 at 16:59

Lloyds 'under investigation by FCA for PPI complaints handling'The Financial Conduct Authority (FCA) is investigating Lloyds Banking Group regarding the way in which it has dealt with payment protection insurance (PPI) complaints.

According to the bank, the regulator is taking a closer look at its procedures after recent reports uncovered evidence of potential bad practice in its PPI complaints handling.

The probe comes after the lender was fined by the watchdog to the tune of £4.3 million in February. On that occasion, it was found that up to 140,000 customers had endured delays with regard to receiving their PPI compensation payments.

Following news of this latest investigation, Lloyds said it was disappointed by the action being taken, revealing it has set aside £50 million so that the cost of the probe can be covered.

The bank stated: "We will work with the FCA to resolve the issues and ensure our customers' complaints are addressed efficiently and fairly."

This news comes as the lender announced its half-year profits of £2.1 billion have enabled it to return to the black, with the speed of the turnaround meaning its recovery is currently ahead of schedule.

At the same point last year, the bank posted losses of £456 million - and the improvement has been helped by the fact the lender has reduced costs further and driven down bad debts by 43 per cent. As a result, bad debts at the bank in the six months to June stood at £1.8 billion. 

Despite this, Lloyds revealed it has paid out an additional £450 million in order to cover PPI mis-selling compensation costs. This means the banks have now shelled out a total of £7.3 billion as a consequence of the PPI scandal.  

The news comes after the Daily Telegraph recently reported that UK banks were unsuccessful when trying to decide on a deadline for claims related to PPI, with discussions between the nation's major lenders breaking down before a general consensus could be reached. 

Posted by Tony MillerADNFCR-3006-ID-801621132-ADNFCR


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