Thursday, 5 May 2011

Lloyds compensation -- will they contact you?

"Please read the letter that I wrote," Lloyds will be telling customers who were mis-sold Payment Protection Insurance.

Those lucky ones will learn that they can claim compensation.

But will Lloyds be writing to all of them? The answer is no.

The nub of this issue is that where Lloyds identifies a "systemic failure" in its sales process, it will write to everyone who has been affected.

But such a failure may only be deemed to have affected tightly defined groups of customers -- and others may be left out.

Lloyds says it is not obliged to contact every single PPI customer to tell them they might have been mis-sold a policy.

The FSA calls the approach "root cause analysis". Here's the section from its rulebook:

In respect of complaintss that do not relate to MiFID business, a respondent must put in place appropriate management controls and take reasonable steps to ensure that in handling complaints it identifies and remedies any recurring or systemic problems, for example, by:
(1) analysing the causes of individual complaints so as to identify root causes common to types of complaint;
(2) considering whether such root causes may also affect other processes or products, including those not directly complained of; and
(3) correcting, where reasonable to do so, such root causes.


  1. So the moral is research and if you think you have a claim make a complaint as no doubt many will get missed.

  2. You're right - some people seem to think that the banks will be contacting anyone who might be able to make a claim. This isn't the case.