The Competition and Markets Authority (CMA) has ordered Lloyds Banking Group to place effective systems and procedures to prevent payment protection insurance (PPI) breaches.
Image: The UK competition watchdog has issued legal directions to Lloyds due to PPI breaches. Photo: courtesy of Carcharoth.
The UK competition watchdog has issued legal directions to Lloyds, over failure of sending PPI reviews and offering inaccurate PPI data to its customer.
CMA noted that Lloyds breached its PPI order multiple times, including six breaches in 2016 for failing to provide customers with correct data and annual reminders.
The competition has issued legal directions based on an investigation by the Competition Commission concluding in 2011.
One of the measures includes customers must secure an annual review once a year from their provider, making clear for customers how much they had paid in and their right to cancel the policy.
CMA has taken the action on Lloyds due to failure of providing annual review to around 14,000 customers between 2012 and 2018.
Lloyds also offered inaccurate information on PPI premiums in annual reviews, which have been sent to 2,884 customers.
CMA also reported that Lloyds has started sending its apology letters to affected customers and provided a reminder of their right to cancel the policy and an offer to refund premiums.
CMA remedies, business and financial analysis senior director Adam Land 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.”
CMA, the UK’s primary competition and consumer authority, is an independent non-ministerial government department that conducts investigations into mergers, markets and the regulated industries and enforcing competition and consumer law.
At present, the competition does not have the power to impose financial penalties for this kind of breaches.