FSA fine Lloyds Banking Group for PPI payment delay

The Financial Services Authority (FSA) has fined Lloyds Banking Group £4.3m for delaying up to 140,000 compensation payments to customers over Payment Protection Insurance (PPI). Lloyds is the first bank to be fined by the FSA for delaying payments, however is not the only bank to be caught up in the mis-selling of Payment Protection Insurance. Lloyds sent out 582,206 letters to customers between May 2011 and March 2012, informing them that they would be paid compensation. Rules from the city watch dog outlined that these customers must be paid ‘promptly’. However, around 140,209 had to wait longer than a month and 8,800 people had to wait more than six months. Lloyds Banking Group have now apologised for the delay stating that “We had not fully anticipated the volume of complaints to be processed at the outset and experienced some administrative errors as we scaled up our systems and processes.” The bank has since said that all except a very small proportion of customers had now been paid in full. Some of those that experienced longer delays, received interest of 8% on the amount owed. The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Setfords Solicitors are a national full service law firm, with debt recovery solicitors in Derby and across the country.