The Competition and Markets Authority has written to Aviva and Lloyds Banking Group after they breached payment protection insurance rules by giving incorrect information to customers.
All PPI customers should receive an annual review statement setting out the cost of their PPI and a reminder that they have the right to cancel under a measure introduced in the Payment Protection Insurance Market Investigation Order 2011.
However, the CMA says some Lloyds PPI customers did not receive their statements or had received statements with incorrect information.
According to the CMA’s letter, about 4,700 customers received annual reviews with incorrect figures in 2015 for “estimated total remaining charge for loan” and “the total remaining amount you must pay back”.
Lloyds said the mistake was due to a coding error.
The CMA says customers of some of Aviva’s distributors – Cheltenham & Gloucester, National Australia Group, Coventry Building Society, Danske Bank, Leeds BS and Norwich & Peterborough BS – also received annual statements with incorrect calculations for amounts paid over the previous 12 months.
Aviva has been asked to send apology letters to those impacted.
The letter also says 207 Lloyds customers had been overcharged premiums since March 2013 due to the inability to freeze premiums after the records were moved to a new IT platform.
It also explains that, after a review, Lloyds discovered that 875 “non-automated mortgage repayment insurance customers” had an active policy and should have received an annual review before 2015/16, but had not.
Lloyds says it has remedied this issue.
There were also three other issues that were notified before included in Lloyds’ 2017 compliance report. These included issues with not issuing annual reviews to mortgage customers or including incorrect data in annual reviews.
As a result, Lloyds must send apology letters and refund PPI premiums to affected customers.
In October, LBG set aside another £1bn to compensate for mis-sold PPI, taking the firm’s total bill to £17bn.
In 2015, the FCA fined LBG £117m for failing to properly handle PPI complaints, which was the largest ever retail penalty issued by the regulator.