Lloyds Fined £94 Million for “Unfair” Treatment of Mortgage Customers
The FCA found that the banking group failed to take customers’ personal circumstances into account when they encountered financial difficulties.
On Thursday, the Financial Conduct Authority (FCA) issued a fine of £64,046,800 to Lloyds Banking Group for failing to deliver fair treatment of mortgage customers.
The FCA said that Lloyds Bank, Bank of Scotland and The Mortgage Business (brands all owned by Lloyds Banking Group) did not obtain enough information to properly assess mortgage customers in payment difficulties or arrears, potentially delivering unfair treatment to more than a quarter of a million customers between 2011 and 2015.
Compounding the issue, cuts by the bank meant that most call handlers dealing with customers in mortgage arrears were new to their role and unable to consult more experienced staff.
Mark Steward, the FCA’s executive director of enforcement and market oversight, said in a statement: “Banks are required to treat customers fairly, even when those customers are in financial difficulties or are having trouble meeting their obligations.”
“Customers should still pay what is owed, but banks are obliged to treat their customers fairly when making new payment arrangements,” he continued, adding that other firms should “take notice” of the FCA’s actions and ensure fair treatment of their own customers.
A Lloyds Group spokesperson said: “We have contacted all customers who were affected between 2011 and 2015 to apologise and have already reimbursed all who were charged fees at the time. Customers do not need to take any action.”