The Competition and Markets Authority (CMA) has taken action against Lloyds Banking Group (LON:LLOY), following breaches affecting payment protection insurance (PPI) customers. The watchdog now requires the lender to put effective systems and procedures in place to prevent similar incidents from happening in the future.
Lloyds’ share price has climbed higher in today’s session, having gained 0.74 percent to 58.82p as of 13:41 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index having fallen deep into the red and currently standing 1.02 percent lower at 7,433.61 points.
CMA takes action against Lloyds
The CMA announced in a statement today that it had issued Lloyds with legal directions after the bailed-out lender failed to send annual payment protection insurance (PPI) reviews and provided incorrect PPI data to its customers. The watchdog notes that this is not the first time the FTSE 100 group has breached its order, having reported six breaches in 2016 for failing to provide customers with correct data and annual reminders.
The order was put in place in 2011, following an investigation by the CMA’s predecessor, the Competition Commission.
“We are disappointed that Lloyds has again failed to provide these important reminders or provide accurate data to its customers,” Adam Land, the CMA’s Senior Director of Remedies, Business and Financial Analysis, said in the statement, adding that the watchdog was “now requiring legal assurances from Lloyds that they have measures in place to prevent similar breaches from ever happening again”.
Lender ‘extremely sorry’
The Financial Times quoted a Lloyds spokesperson as saying that the bank was writing to a small number of credit card customers whom it has identified as having not received their annual PPI statements.
“Whilst we have resolved the cause of the issue, we are extremely sorry for any inconvenience caused. We will be contacting all affected customers,” the spokesperson added.