By Nikki Greener-
The Competition and Markets Authority (CMA) has issued Lloyds with legal directions after it failed to send annual payment protection insurance (PPI) reviews, and provided incorrect PPI data to its customers. It is now requiring Lloyds to put effective systems and procedures in place to prevent similar incidents from happening in the future.
The CMA is UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law.
The organisation says this is not the first time Lloyds Banking Group has breached the CMA’s PPI order, having reported 6 breaches in 2016 for failing to provide customers with correct data and annual reminders.The CMA’s action comes following an investigation into PPI by the Competition Commission, concluding in 2011.
In 2011, the CMA wrote to Lloyds Banking Group(LGB) to highlight breaches against Article 6, that is the duty to notify a Customer before deducting overdraft charges. and debit interest and one which relates to Article 7 , provision of switching information of the Northern Ireland Personal Current Account Banking Market Investigation Order 2008 . Lloyds bank were also accused of temporarily turning off automated 14 days pre-notifications, contrary to the requirement for notification to customers before it deducted an overdraft charge and debit interest.
The CMA decided to act against Lloyds Banking Group after IT problems meant approximately 14,000 of its customers did not receive this reminder between 2012 and 2018. Lloyds also provided incorrect information on PPI premiums in annual reviews it sent to 2,884 customers.
Representatives of LBG told The Eye Of Media.Com that it had experienced an IT error which led to its automated issuing of pre-notifications being temporarily turned off for paperless-only customers. This
error occurred between 28 January and 6 March 2016 and affected 6,300 customers account.
Full refunds of overdraft charges and fees plus 8% interest were provided to those
customers in September 2016. LBG reported that the net total amount refunded to
affected customers was £18,456.53.
Adam Land, the CMA’s Senior Director of Remedies, Business and Financial Analysis, said:
”We are disappointed that Lloyds has again failed to provide these important reminders or provide accurate data to its customers.
These are serious breaches and, as we did with Barclays in August, we are issuing Lloyds with legal directions which can be enforced by a Court to ensure they comply.
Following a series of breaches, we’re now requiring legal assurances from Lloyds that they have measures in place to prevent similar breaches from ever happening again.
The annual PPI review is an important measure so customers know they still have a policy and how much it is costing them each year, as well as their right to cancel or switch.
Lloyds has started sending its apology letters to affected customers and has provided a reminder of their right to cancel the policy and an offer to refund premiums”.