BBC Unearths Lloyds Redress Scandal 

BBC Unearths Lloyds Redress Scandal 

Aug 28, 2017

Undercover investigations by the BBC have unearthed a fresh scandal for Lloyds Banking Group in the mis-selling of PPI saga. 

According to the BBC’s investigations, Lloyds Banking Group have been scrimping on the compensation it pays to PPI claimants, saving the tax-payer backed bank more the £60m in the past year alone, according to PPI expert Cliff D’Arcy. By offering compensation under a regulatory provision known as ‘alternative redress’, Lloyds have allegedly been short changing some customers entitled to compensation. 

The ‘loophole’ of alternative redress, also known as comparative redress, allows banks to pay out less compensation by using the assumption that customers who were mis-sold single premium PPI policies, would in fact have opted to pay for cheaper, regular premium PPI policies. Since banks are entitled to deduct the cost of a regular premium policy from their compensation under the alternative redress provisions, many customers’ PPI pay outs will have been significantly and unfairly reduced.

According to D’Arcy, alternative redress should only legitimately be applied to less than 1% of PPI cases. However, claims management trade body the PFCA maintains that research shows that during certain months, Lloyds were in fact applying alternative redress to more than 25% of mis-sold PPI cases. 

Cliff D’Arcy, who has previously worked for HBOS’ PPI operation told the BBC: 

“A tax payer sponsored bank is depriving taxpayers of their rightful compensation by using a loophole. It’s a scandal coming out of a scandal” 

While Lloyds Banking Group have argued against the accusations:

“The numbers that have been provided by the BBC by the claims management companies are incorrect and deeply misleading”

In the last year some 378,000 PPI complaints were logged by the Financial Ombudsman as consumers continue to seek redress in the ongoing PPI saga. As a claims management company who has helped thousands of people successfully claim back their mis-sold PPI, we are shocked to learn that Lloyds have been accused of short changing those customers who have already been let down and mis-led by their bank. Echoing the words of Cliff D’Arcy, what we may be witnessing is a ‘scandal coming out of a scandal’, and these accusations against Lloyds do little to reinforce the diminishing trust between customers and their banks. 

Listen to BBC Radio 4's special programme on the investigation, PPI: Britain's Biggest Banking Scandal

Written by We Fight Any Claim

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