The financial watchdog has fined Lloyds Banking Group £64 million over failures in how it handled mortgage customers in payment difficulties or arrears between 2011 and 2015.
The Financial Conduct Authority (FCA) said its investigations found that Lloyds Bank, Bank of Scotland, and The Mortgage Business, did not provide the appropriate level of support to mortgage customers in arrears.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “Banks are required to treat customers fairly, even when those customers are in financial difficulties or are having trouble meeting their obligations.
“By not sufficiently understanding their customers’ circumstances the banks risked treating unfairly more than a quarter of a million customers in mortgage arrears, over several years.
“In some cases, customers were treated unfairly, including vulnerable customers.
“Customers should still pay what is owed, but banks are obliged to treat their customers fairly when making new payment arrangements.”
A Lloyds Banking Group spokesman said: “We have contacted all customers who were affected between 2011 and 2015 to apologise and have already reimbursed all who were charged fees at the time.
“Customers do not need to take any action.
“We have since taken significant steps to enhance how we support mortgage customers experiencing financial difficulty, including investing in colleague training and procedures.
