Insurance
Thousands of Lloyds customers in line for new PPI refunds
Almost 9,000 customers of Lloyds Banking Group are in line for refunds after the bank breached rules covering annual reminders for payment protection insurance (PPI) customers.
All providers of PPI are obliged to send annual reminders to customers which clearly outline the sort of cover they have, the cost of their policy and their right to cancel, thanks to the Competition and Markets Authority’s (CMA) PPI Order.
However, Lloyds reported itself to the CMA on account of three breaches of the order. Two related to displaying the monthly amount policyholders can claim on their insurance in the wrong section, while a third breach related to this figure being incorrect.
In total 8,800 policyholders were affected by these breaches. Lloyds has been instructed to inform those policyholders and offer refunds, which will amount to around £17,000.
This isn’t the first time Lloyds has fallen foul of the PPI order, having been on the receiving end of formal enforcement action from the CMA in 2018. These related to 18 breaches of the order over an eight-year period, which led to refunds of around £950,000.
The need for greater enforcement powers
Adam Land, senior director of remedies, business and financial analysis at the CMA, said that it was a “real concern” that providers were still breaking the rules by sending inaccurate PPI reminders despite the clear, well-established order from the CMA, adding that this could mean people continue paying for insurance they no longer need.
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He added: “We welcome the fact that Lloyds’ has refunded – or committed to refund – customers £975,000 and we will monitor the bank closely to make sure those affected by the latest breaches receive the refunds to which they are entitled. It’s important that all PPI providers take notice – we will continue to act if providers carry on breaking the rules.”
The CMA has called for an extension of its powers which would allow it to impose financial penalties on businesses which breach its rules. Currently it is limited to only ordering them to provide refunds.
It argued that this would allow it to tackle bad behaviour more quickly, and act as a deterrent against breaking the rules.