LONDON (Reuters) - Britain’s Competition and Markets Authority has demanded Lloyds Banking Group (LLOY.L) toughen its procedures around payment protection insurance (PPI) after it accused the bank of breaching its current arrangements.
The CMA said Lloyds had failed to send annual reviews, which have been required by the regulator since 2011, to around 14,000 of its PPI customers.
The reviews set out how much customers need to pay and their right to cancel the policy. Some of the reviews that were sent by the bank also contained incorrect figures, the CMA said.
Lloyds, one of the worst offenders in Britain’s costliest mis-selling scandal, had already breached a 2011 order by the CMA outlining how PPI providers should operate six times previously.
“We are disappointed that Lloyds has again failed to provide these important reminders or provide accurate data to its customers,” Adam Land, the CMA’s senior director of remedies, business and financial analysis, said in a statement.
“These are serious breaches.”
The bank, which has already paid out over 18 billion pounds ($23.37 billion) in compensation over mis-sold PPI and had hoped to have drawn a line under the scandal, said it was writing to affected customers.
“Whilst we have resolved the cause of the issue, we are extremely sorry for any inconvenience caused,” a spokesman said in a statement.
Under the new directions issued by the CMA, Lloyds will need to provide more detailed information on its compliance with the CMA’s order, report breaches within 14 days and appoint an independent body to review its compliance systems each year.
It will also have to strengthen its monitoring and take steps to ensure its systems remain robust during migrations.
In August, the CMA also took action against Barclays (BARC.L) after the bank breached its 2011 order following a technical issue.
Reporting by Emma Rumney; Editing by Sinead Cruise and Jan Harvey