On June 4, 2015, the Financial Conduct Authority issued a final notice imposing a fine of £117m on Lloyds Bank Plc, Bank of Scotland Plc and Black Horse Ltd (together LBG). The fine relates to the unfair approach of LBG’s complaint handling operations and failures to treat customers fairly when handling Payment Protection Insurance complaints between March 2012 and May 2013. In handling PPI complaints, LBG designed and implemented a policy which sought to comply with the rules and guidance of UK regulators. However, during the relevant period, LBG advised its complaint handlers that LBG’s PPI sales processes had been “compliant and robust,” unless notified otherwise. This was described as “the Overriding Principle.” The Overriding Principle affected the judgments of some complaint handlers who relied on this principle to dismiss customer accounts of what had happened during the PPI sale, and some complaints were therefore not fully investigated. LBG also failed to notify its complaints handlers of the known failings of its sales of PPI. The investigation showed that a significant number of customer complaints were rejected unfairly due to these reasons. The FCA found that customers who had originally been mis-sold PPI and treated unfairly were once again treated unfairly and denied the redress that was owed to them. 

The final notice is available at: http://www.fca.org.uk/static/fca/documents/lloyds-banking-group-2015.pdf