The Financial Services Authority recently shamed three former Lloyds bosses for failing to act upon the mis selling of PPI or payment protection insurance. Lloyds is currently the biggest contributor to the UK PPI claims compensation package with £5.3 billion, almost half of the £13 billion total.
The FSA requested the CEOs to reveal the information they know in a recent press conference and how Lloyds became the biggest PPI mis seller.
Carol Sergeant, the ex-chief risk officer in Lloyds during the “insurance boom”, told the press that she knew how the company was selling the insurances without considering fairness for customers. The issue was raised at a board-level meeting during her term, which met no notice or action.
Ex-Lloyds Head of Retail, Helen Weir, explains that the insurance policy made up 14% of the company’s annual income. She claimed that the customers demanded to have PPI. However, consumer reports say that Lloyds “recommended” the insurance policy to all their customers, which led to many being mis sold an insurance policy from their company.
Phil Loney, ex-head of the insurance product development and implementation, admitted that Lloyds used PPI to earn more profit from customers regardless if they can make any use for the insurance.
However, questions about why the FSA withdrew its investigation probe from Lloyds during the 2005-2007 era remains a mystery. However, the FSA said the issue was “resolved” in 2008 after Lloyds helped some banks recover to save the country from the fiscal crisis.