Britain's Lloyds Banking Group has learned the hard way that ignoring worries expressed by clients doesn’t pay off in the long term. It has to pay a hefty fine for failing to handle complaints over insurance products.
Lloyds Banking Group confirmed Friday it was fined 117 million pounds (160 million euros, $180 million) for failing to handle complaints about themis-selling of loan insurance products
between March 2012 and May 2013.
Britain's financial regulator, the Financial Conduct Authority (FCA), said Lloyds had dismissed clients' personal accounts and in some cases had not fully investigated complaints.
The cases under review were all linked to the banking group's sale of payment protection insurance (PPI) policies.
Lower bonus payments
PPI products were meant as a safety net for borrowers in the event of sickness or unemployment, but were often sold to clients who did not require them or would have been unable to claim any money.
But complaints by clients were not taken seriously, with the FCA saying that a significant number of claims were unfairly rejected right away as a result.
Lloyds has already set aside 12 billion pounds to compensate affected customers. It said it would reduce bonuses paid to staff by 30 million pounds in 2015 in response to the fine
hg/cjc (AFP, Reuters)