Lloyds Banking Group has been fined £64m by the Financial Conduct Authority (FCA) for failing to treat mortgage customers fairly after they fell into financial difficulty. The penalty relates to the bank's mishandling of more than 526,000 customers between 2011 and 2015.
The FCA found that Lloyds did not gather adequate information about customers struggling with payments, meaning call handlers lacked the details needed to assess individual circumstances. Additionally, handlers could approve payment arrangements without senior oversight, leading to a less flexible system that may have resulted in inappropriate agreements.
The problems worsened when Lloyds merged its mortgage and unsecured lending call handler teams following its merger with HBOS during the financial crisis. Specialist mortgage arrears sites were closed, and operations moved to locations where most staff were new to the role.
Affected customers have been reimbursed a total of £300m. Lloyds accepted the findings, which led to a 30% reduction from the original fine of £91.5m. The bank has apologised and said it has invested in colleague training and procedures to improve support for customers in financial difficulty.
