Release Date: 5th June 2015
To access the original FCA document, click here.
Summary
The FCA fined Lloyds £117 million for failing to handle Payment Protection Insurance (PPI) complaints fairly between March 2012 and May 2013. Lloyds assessed over 2.3 million PPI policies and unfairly rejected 37% of complaints. The bank issued guidance to complaint handlers, known as the Overriding Principle, which assumed the PPI sales processes were compliant and robust unless proven otherwise, leading to biassed assessments. Complaint handlers were not informed of known failings in the PPI sales process, leading to unfair dismissal of complaints without thorough investigation. Additionally, Lloyds did not always contact customers to obtain their account of the sale, resulting in many complaints being unjustly rejected.
Key Takeaways for Other Firms:
- Fair Complaint Handling: Ensure all complaints are assessed impartially, and customers are given the opportunity to provide their account.
- Transparent Processes: Inform complaint handlers of any known issues in sales processes to enable fair and accurate assessments.
- Effective Customer Communication: Maintain open communication channels with customers to gather all necessary information for complaint resolution.
- Compliance Monitoring: Regularly review and update complaint handling processes to ensure they meet regulatory standards and fair treatment principles.
- Remediation and Redress: Establish robust remediation programmes to address past failings and ensure affected customers receive appropriate redress.
By adhering to these principles, firms can maintain customer trust, ensure fair treatment, and avoid substantial regulatory penalties.
