Lloyds ‘sorry’ as bank is fined £91m for misleading insurance customers
Written by Hit Music Radio News on 08/07/2021
Lloyds Banking Group has been fined £91m by the City regulator for misleading millions insurance customers on renewal charges over eight years.
The Financial Conduct Authority (FCA) said the penalty related to notices sent to nine million existing customers by several of its insurance units between 2009 and 2017.
The watchdog said the letters had claimed that the renewal amounts were “competitive” when new customers could actually get a better price on the same products.
FCA executive director, Mark Steward, said: “Millions of customers ended up receiving renewal letters that claimed customers were being quoted a competitive price which was unsubstantiated and risked serious consumer harm.”
A series of control failings were blamed for the error by the FCA which also identified that, over the same period, the bank’s insurance arms had sent letters to around 500,000 home insurance customers saying they would receive a renewal discount.
It found that no such discount was ever applied or intended to be.
The regulator said 350,000 of those customers had received compensation to the tune of £13.6m to date.
It added that the fine reflected the eight-year duration of the failures and the group’s position in the insurance market.
Lloyds said it had improved its processes in light of the FCA’s investigation.
A spokesperson responded: “We’re sorry that we got this wrong.
“We’ve written and made payment to those customers affected by the discount issue and they don’t need to take any further action.”
© Sky News 2020