LONDON — British regulators are preparing to impose a substantial fine on the Lloyds Banking Group for its handling of customer complaints related to a contentious insurance product that has cost the industry billions of dollars, a person familiar with the settlement discussions said on Thursday.
The Financial Conduct Authority could soon announce a fine in excess of 100 million pounds, or around $153 million, as part of a settlement with the lender over how it dealt with complaints regarding the improper sales of payment protection insurance, said the person, who was not authorized to discuss the matter publicly.
It would be the largest fine issued by the regulator related to the handling of such claims. In April, the regulator issued a fine of £20.7 million against Clydesdale Bank, a unit of National Australia Bank, for failings in its process for handling complaints.
The F.C.A. and Lloyds both declined to comment on Thursday.
The potential settlement was reported by Sky Newsearlier on Thursday.
Payment protection insurance has cost British lenders about $29 billion over the past four years as they have seen waves of complaints from consumers over the product.
The insurance was sold broadly by banks in Britain to consumers taking out mortgages, applying for credit cards and seeking other loans. More than 45 million policies were sold from 1990 to 2010.
The complex pricing and the terms of the policies made the insurance inappropriate for many consumers, according to the F.C.A.
Banks in Britain have been pushing regulators to cap the time frame in which consumers can seek redress as the amount of claims has far surpassed the lenders’ original estimates and the number of claims has not fallen as quickly as expected.
The F.C.A. announced in January that it would review the efforts that banks have made to compensate consumers and examine whether further intervention is appropriate. The regulator is expected to announce the results of its review this year.
Lloyds was the largest provider of the product by far, and has set aside about £12 billion to cover claims.
No comments:
Post a Comment