Lloyds hit with £64m fine over mortgage failures

LLOYDS Bank was whacked with a £64 million fine by the City watchdog today for mistreating 250,000 mortgage customers who were struggling with payments.

In a taste of what may be to come for the big banks as the Covid crisis continues, Lloyds and its subsidiaries Bank of Scotland and The Mortgage Business were found to have failed vulnerable customers.

The fine, while serious, is far from the biggest ever. Lloyds itself was fined £117 million over PPI complaints by the Financial Conduct Authority.

Today Mark Steward at the FCA said: “Banks are required to treat customers fairly, even when those customers are in financial difficulties or are having trouble meeting their obligations. By not sufficiently understanding their customers’ circumstances the banks risked treating unfairly more than a quarter of a million customers in mortgage arrears, over several years. In some cases, customers were treated unfairly, including vulnerable customers.”

The bank, led by Antonio Horta-Osorio, is on the way to paying £300 million in redress to customers for failings between April 2011 and December 2015.

Steward added: “Customers should still pay what is owed, but banks are obliged to treat their customers fairly when making new payment arrangements.

“Firms should take notice of the action we have taken today to ensure that their own treatment of customers meets our expectations.”