Lloyds bank is set to pay back almost £300 million ($394m) to around 600,000 customers after making mistakes when collecting mortgage payments.
The bank will also be setting aside £700m ($920m) for mis-sold PPI, a problem which has already cost the company an eye-watering £17.4 billion ($22.8bn), according to the BBC. In total UK banks have had to set aside more than £30bn ($39.4bn) to cover PPI compensation costs.
Advert
Credit: PA
It has now said it will refund all fees charged to customers who fell behind with their mortgage payments between 2009 and 2016.
In total 590,000 customers are said to be getting a share of the £283m ($372m) pot, meaning on average about £480 ($630) each.
Jonathan Davidson, from banking regulator the FCA, said: "Ensuring fair treatment of customers, especially those in financial difficulties or who are vulnerable, is a key priority for the FCA.
Credit: PA
Advert
"We continue to engage with Lloyds as it works to improve the way it treats customers in arrears."
The FCA concluded that the charges shouldn't have been applied, as the bank didn't do enough to understand the individual circumstances of customers and check that payment plans were affordable.
Lloyds Banking Group boss Antonio Horta-Osorio. Credit: PA
Advert
Lloyds Banking Group boss
Antonio Horta-Osorio said: "We have a commitment as a management team
of putting these legacy charges behind us as soon as possible."
On top of the charges, customers may also be offered payments for distress and inconvenience. There will also be payments for consequential losses due to the issue, such as fees charged by banks for missing a direct debit.
Despite having to fork out for these pay-outs, the bank has reported its biggest half-year profit in eight-years.
Advert
The bank will be contacting those affected.
Sources: BBC, Mhe Mirror
Featured Image Credit: PA