LLoyds have been found to 'short-change' 1 in 4 Re-claimants

[dx100uk]

One of Britain’s biggest banks has cost victims of the payment protection insurance (PPI) scandal tens of millions of pounds by wrongly cutting their compensation awards, a new investigation claims.

 

 

Lloyds Banking Group, which is 33 per cent owned by the taxpayer after a £20bn bailout, has been unilaterally reducing payouts to people who were mis-sold the notorious policies. The bank’s behaviour has been described by one expert as “a scandal coming out of a scandal”.

An investigation by the BBC has found evidence to suggest the bank provided more than one in four PPI claimants – a figure that the bank disputes – with “alternative redress” – an obscure loophole that allows Lloyds to assume victims who were wrongly sold single-premium PPI policies on loans would have bought a cheaper regular premium PPI policy. Single-premium policies involve one-off payments, rather than monthly outlays. Over the past year, the bank – which has been forced to set aside £10bn to cover PPI compensation claims – has allegedly often been cutting the cost of the cheaper regular premium policy from the full payout it would otherwise have been required to pay.

 

 

 

http://www.independent.co.uk/news/business/news/lloyds-caught-innew-ppi-storm-taxpayerbacked-bank-saved-tens-of-millions-of-pounds-by-wrongly-cutting-compensation-to-customers-9213188.html

[citizenB]

I wonder how many other banks have been using this as well !

[citizenB]

 

LLoyds Banking Group said: “There are a small number of loan customers who were eligible and suitable for PPI and who bought a single-premium PPI policy. In some cases if the option had been available to these customers at the time, they would have bought a regular premium policy instead of the single premium policy.

 

“The FCA handbook is very clear that in these specific circumstances, the provider should give redress that puts the customer in the position they would have been in had the customer taken a regular premium policy. Since February 2013 and on this basis, we have offered comparative redress only on loans PPI complaints.”

 

 

So, they are assuming that a small number of customers "might" have purchased a cheaper policy had they been given the choice and refunding the difference between the two only !

[rebel11]

http://www.bbc.co.uk/news/business-26715982

 

 

 

PPI expert Cliff D'Arcy told the BBC Lloyds had saved more than £60m over the past year by cutting compensation.