Lloyds Banking Group has been fined £90 million (US$124.6 million) for sending millions of misleading letters to customers in its home insurance division, the largest penalty levied by the Financial Conduct Authority (FCA) since 2019.
The FCA found Lloyds had sent almost 9 million messages, encouraging customers to renew their home insurance policies, which made unsubstantiated claims that they were being offered “competitive” prices. The bank took almost a decade to remove the language from all its communications. It also falsely promised loyalty discounts to about 500,000 customers.
Mark Steward, the FCA’s executive director of enforcement and market oversight, said Lloyds’ actions “risked serious consumer harm” to millions of customers. “Firms must ensure their communications with customers are clear, fair and not misleading. [Lloyds] failed to ensure that this was the case.”
The fine is the largest to be handed out by the regulator since Standard Chartered’s punishment for violating money laundering regulations in 2019. It comes amid a broader effort by the FCA to clamp down on insurance businesses that take advantage of loyal customers.
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