Lloyds agrees FSA's largest consumer repayment

Tuesday, 22 February 2011 09:20

Lloyds Banking Group has announced that it has come to a voluntary agreement with the Financial Services Authority (FSA) regarding the cap on a standard variable rate (SVR) mortgage.

Halifax mortgage customers who signed their agreement between 2004 and 2007 could find they will receive repayments from the bank due to unclear wording, which may have led to confusion.

The wording related to a cap on the SVR rate, which may have resulted in some customers to believe they were eligible for it when they were not, according to the Financial Times.

Some £500 million pounds has been allocated by Lloyds Banking Group, which is expected to reimburse 300,000 customers.

For each party affected, the repayment will total the additional interest they have paid following the change in the SVR cap since January 2009.

The FSA notes that this consumer compensation is the largest they have agreed.

Lloyds highlights it "believes that a proactive co-ordinated programme to identify affected customers and make goodwill payments is the appropriate course of action".

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