Skip to content

Lloyds accused of short-changing PPI claimants

Lloyds Banking Group has been cutting the compensation it pays to payment protection insurance (PPI) claimants, a BBC investigation has revealed.

25 March 2014
PPI
PPI Review

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

Lloyds refused to be interviewed on the issue. It was offering the correct level of compensation in line with regulatory guidance, a statement said.

Lloyds cites a little-known regulatory provision called "alternative redress".

Alternative redress allows a bank, in specified circumstances, to assume that customers to whom it wrongly sold single-premium PPI policies would have bought a cheaper, regular premium PPI policy instead.

In such cases, a bank is entitled to deduct the cost of the regular premium policy from the full compensation they would otherwise have had to pay.

For claimants, this deduction can make a large difference to the compensation Lloyds offers.

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

Advisor Magnifyglass

Get in touch with your local MoneySave adviser.

Financialadvisor Family

Take our FREE no obligation Financial Health Check

Start your Health Check today
Sign up to our newsletter to receive regular updates.