More than 200,000 customers will receive payouts from Lloyds Banking Group after it failed to inform them about changes to interest rates on their savings accounts seven years ago.
As a result, these customers were never given the chance to switch to a better deal, and so missed out on interest earnings.
The banking group has reportedly paid out £6m so far to customers of Lloyds Bank, Halifax and Bank of Scotland who were affected by the blunder, which dates back to 2012.
Which? explains who is eligible for the payout, how to claim the money and whether you should switch bank accounts if you’re unhappy with your current one.
Why is Lloyds paying out customers?
Lloyds Banking Group failed to inform thousands of customers that it was slashing interest rates on various savings accounts and interest-paying current accounts with Halifax, Bank of Scotland and Lloyds.
In a small number of cases, Lloyds Banking Group also did not inform customers when their terms and condition changed.
The errors, which begun in 2012, meant savers did not have an opportunity to move their funds to an account paying better interest.
Lloyds Banking Group has so far reportedly paid out a total of £6m to customers affected by the error.
In theory, this would equate to each customer receiving £30. In practice, however, the amount you’ll receive will reflect the interest you missed out on – so your payment will depend on how much you held in your current account. Those with larger balances may be in for bigger windfall.
Should you contact Lloyds over payment?
Lloyds said it has written to all affected customers, so you won’t need to do anything to receive your payout.
In its letter, Lloyds wrote: ‘We didn’t send you some letters about changes to your savings account when we should have.
‘If we had sent this information to you at the time, you may have chosen to put your money in a different savings account. I’m sorry this happened.”
The banking group will also seek to track down anyone who has changed address or left the bank.
If your situation has changed or you’ve moved providers, you can contact the relevant banks on these numbers:
- Lloyds 0345 6021998
- Halifax 0345 720 3040
- Bank of Scotland 0345 721 3141
Find out more: Best and worst banks
Check interest rates and bank statements
The Lloyds error is a reminder of why it pays to stay on top of your interest rate.
Regularly checking your current rate against the competition will help you get the best deal.
If your money is in a fixed-rate account, or you’re offered an ‘introductory rate’, you should take note of when the period is due to end, and shop around for a new home for your savings.
On a variable rate account, be proactive about checking the current rate and keep an eye out for any dips.
Customers should also regularly check their bank statements. Keeping an eye on your accounts will allow you to detect potential fraud, spot potentially excessive transaction fees or stop direct debits which you had forgotten signing up for.
- Find out more: best bank accounts
Choosing the right savings account
If you need help choosing the right savings account, we’ve rounded up the best rates on the market in 2019.
We have also ranked the best and worst providers based on feedback from thousands of customers.
You can see the results in our guide on how to find the best savings account
Find the best bank account
Rates are only one part of the puzzle – the customer service offered by your bank is also an important consideration.
Which? has also rated the best and worst banks based on customer service after feedback from customers. We ranked nine elements of the banks’ service, including handling complaints, online and mobile banking and how clear they are with their charges.