LLOYDSTSB, BANK OF SCOTLAND, AND HALIFAX MIS-SELLING
Lloyds Banking Group has been fined a record £28 million by the City regulator
for paying its staff such generous bonuses to sell investments and insurance
that there was a danger they would sell them to customers who neither wanted nor
needed them. Altogether sales of more than a million products from 1 January
2010 to 31 March 2012 are under suspicion after the investigation by the
Financial Conduct Authority.
Many of the 700,000 customers affected should be paid compensation. But at the
moment it is not at all clear that Lloyds Banking Group will find them. It is
confining its review of files to just one in eight of its sales staff and it
expects to pay compensation to just one in seven of those examined. That would
mean redress for fewer than 12,000 people mis-sold investments or insurance in
the 27 months which the city regulator the Financial Conduct Authority
investigated.
The bonus schemes and potential mis-selling affected customers of all three
banks in the Lloyds group – LloydsTSB, Bank of Scotland, and Halifax. Customers
who were sold insurance or investments by any of these banks should consider
making individual complaints if they think they may have been mis-sold. That
would happen if the product was unsuitable or not properly explained or if they
were persuaded to buy it by pushy sales staff. Unions, staff, and consumer
groups say that the mis-selling might not have been confined to the period the
regulator investigated.
If mis-selling is proved then compensation may be payable. For insurance
products that will be the total amount of the premiums paid plus 8% interest on
those amounts. Compensation for investment products is more complex. Over the
last four years many investments in shares have done well as the stock market
has risen. So even if an investment was mis-sold to someone it may have left
them better off than if they had not put their money into it. In those cases no
compensation would be paid as no money has been lost.
To make a claim call or email the bank on the number that will be on any
correspondence. Most of these numbers begin 0845 which may cost a lot to call
especially from a mobile. If an international number is given then it may be
cheaper to call that using a zero instead of the +44. Insist on your complaint
being dealt with on that number – there is no reason the bank should profit from
a problem it has caused.
You may find the bank does not deal with your complaint well or swiftly. In
February Lloyds was fined £4.3 million for the way it handled complaints from
more than half a million customers who were victims of an earlier insurance mis-selling
scandal. If your complaint is not resolved within eight weeks you can take it
direct to the Financial Ombudsman Service.
Further information
FCA
fines Lloyds £28 million
http://www.fca.org.uk/news/press-releases/fca-fines-lloyds-banking-group-firms-for-serious-sales-incentive-failings
Financial
Ombudsman Service
http://www.financial-ombudsman.org.uk/consumer/complaints.htm
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