Lloyds Banking Group is to repay almost Pounds 300 million to around 600,000 customers after an investigation into how it dealt with people who fell into arrears with their mortgages, according to reports.
The lender, which owns the Bank of Scotland, is expected pay out on average Pounds 350 in repaid fees and interest to affected customers, according to Sky News.
It is thought some customers were mistakenly charged between 2009 and 2016 after the company applied policies relating to financial difficulty assessments.
The latest scandal to affect the banking industry will reportedly cost Lloyds just under Pounds 300m, with more than Pounds 50m being set aside for administration costs.
Lloyds is set to announce customer contact and remediation programme alongside half-year financial results which are expected to be affected by higher- than-anticipated provision for the mis-selling of of Payment Protection Insurance.
Although the majority of the bill for the way people were treated who fell into arrears is thought to have been covered by previous financial announcements, an insider was quoted by Sky as saying Lloyds would have to make provisions of tens of millions of pounds.
The Financial Conduct Authority (FCA), which is investigating the group's mortgage arrears handling activities, is thought to have been consulted on the plan.
In May last year, Lloyds was told the FCA had launched the probe. The bank is said to have decided to repay every customer who fell behind with their mortgage repayments.
Credit: By Josie Clarke, Press Association Consumer Affairs Correspondent
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