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Lloyds fined £64m for unfair treatment of struggling mortgage customers

The exterior of a Lloyds Bank branch on Tottenham Court Road, London.

The exterior of a Lloyds Bank branch on Tottenham Court Road, London. Photograph: Jansos/Alamy Stock Photo

Lloyds has been fined £64m by the City watchdog after an investigation found the bank failed treat mortgage customers fairly after they fell into financial difficulty.

The fine is linked to Lloyds’ mishandling of over 526,000 mortgage customers between 2011 and 2015, who have since been reimbursed a combined total of £300m.

The Financial Conduct Authority (FCA) said Lloyds had avoided a higher fine of £91m because it had accepted the regulator’s findings.

The bank’s “systems and procedures for gathering information from mortgage customers in payment difficulties or arrears resulted in the banks’ call handlers not consistently obtaining adequate information to assess customers’ circumstances and affordability”, the FCA said.

Mark Steward, the FCA’s executive director of enforcement and market oversight, 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.

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.”


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