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UK FSA fines Lloyds Banking Group over delayed PPI redress payments

The UK Financial Services Authority (FSA) has imposed a fine £4,315,000 against three Lloyds Banking Group companies for systems and controls failures, which delayed payment protection insurance (PPI) compensation for up to 140,000 customers.

The three firms are Lloyds TSB Bank, Lloyds TSB Scotland and Bank of Scotland, collectively known as LBG.

As per the UK regulatory agency complaint, LBG was supposed to make payment within 28 days of decision letters, which was sent between May 2011 and March 2012.

It said that up to 140,209 customers got their payment after 28 days, while nearly 87,000 customers had to wait for over 45 days, 56,000 more than 60 days, 29,000 over 90 days and 8,800 more than six months.

The accused companies involuntarily dropped out 24,589 payments from the process and also failed to inform their customers, why the payment had been delayed.

FSA enforcement and financial crime director Tracey McDermott said, "All regulated firms must treat those who complain fairly and that includes paying redress promptly when it is due."

LBG has agreed to settle the case at an early stage of the investigation and therefore availed a 30% discount, without which the fine would have been £6,164,327.