Lloyds Banking Group has reported a huge pre-tax loss after being forced to make a £3.2bn provision for potential mis-selling claims by customers who took out Payment Protection Insurance (PPI).
The lender, which is 41% owned by the British taxpayer, announced a total loss of £3.47bn and has withdrawn from all legal proceedings against the Financial Services Authority (FSA) in relation to PPI.
Last month, The British Bankers Association (BBA) lost a High Court judicial review against FSA guidance on PPI mis-selling complaints. Which? has since published an advert in The Times calling for the BBA to admit defeat over the review and ensure that banks pay back the premiums of customers who have been wrongly sold PPI.
The Financial Ombudsman Service has received over 200,000 complaints in total about mis-sold PPI policies – upholding 3 out of 4 cases in favour of consumers.
Which? on Lloyds’ PPI announcement
Which? executive director, Richard Lloyd, commented: ‘This is great news for the millions of Lloyds customers who have been mis-sold PPI. It’s refreshing to see a bank break ranks from its peers and do the right thing by its customers.
‘The rest of the UK’s banks must now follow suit and draw a line under the great PPI mis-selling scandal by withdrawing their legal challenge of the FSA and proactively reimbursing the millions of customers who were mis-sold PPI.
‘We don’t think Lloyds should have kept its shareholders in the dark for so long about its PPI liability. This should serve as a wake-up call to shareholders of other banks that treating customers fairly cannot be ignored.
‘Instead of trying to claw back these losses from its customers, Lloyds should instead look at the bonuses of the senior managers who presided over this systemic mis-selling.’
Claiming compensation for mis-sold PPI
The FSA has carried out 24 PPI-related enforcement actions against banks and other financial firms since 2005, levying a total of £12.6 million in fines for mis-selling.
If you think you may have been mis-sold PPI and have not yet made a complaint, the Which? online PPI claiming tool, is a quick and easy way to reclaim back mis-sold PPI
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