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LLOYDS Bank was slapped yesterday with a record £117 million fine by the City regulator over the way it handled mis-selling complaints.
The Financial Conduct Authority (FCA) found that the banking group had wrongly denied compensation to customers over payment protection insurance (PPI) — the wider scandal that has already cost Lloyds £12 billion.
Between March 2012 and May 2013 the state-backed group assessed customer complaints relating to more than 2.3 million PPI policies of which 37 per cent were rejected — many of them wrongly.
“Customers who had already been treated unfairly once by being mis-sold PPI were treated unfairly a second time and denied the redress they were owed,” said FCA acting director of enforcement and market oversight Georgina Philippou.
“Lloyds’s conduct was unacceptable.”
The fine means that chief executive Antonio Horta-Osorio will miss out on £350,000 in deferred bonuses as a result of the failings which occurred on his watch.
He is among a number of top executives to have payouts totalling £2.65m withheld for the period.
Lloyds’s bonus pool, which will be announced next spring, will be cut by £30m as a result of the fine. Last year the pool reached £360m.
The fine is the largest ever retail banking penalty imposed by the FCA — other, larger charges have related to trading scandals such as Libor benchmark rate-rigging and foreign exchange rate manipulation.
“If trust in financial services is going to be restored following the widespread mis-selling of PPI, then customers need to be confident that their complaints will be treated fairly,” said Ms Philippou.
