'It was a misunderstanding': Former Lloyds boss denies widespread mis-selling of payment protection insurance policies
The former boss of Lloyds Bank this morning denied widespread mis-selling of payment protection insurance policies.
Eric Daniels told the Parliamentary Commission on Banking Standards that the multi-billion scandal was instead caused by a “misunderstanding” between banks and watchdogs.
He described himself as “deeply regretful” for genuine mis-selling but said: “The vast majority (of PPI sales) are not related to that but to difference of understanding between industry and regulator.”
Lord McFall attacked the unrepentant former boss citing a series of warnings about PPI policies going back ten years. The Financial Ombudsman Service has found in favour of the consumer in 98 per cent of cases.
“It would seem as if the whole world knew about PPI mis-selling and customers being ripped off but the board of Lloyds. You were just going to go on and make your profits,” said the Labour peer.
But Mr Daniels refused to give ground. He told the Commission: “I believe customers did know what they were buying. I think they got good value.
“When we priced PPI we built the product that was the most generous in the market. We gave a very competitive price for a very valuable product and I think customers enjoyed that,” he said.
“There are a fair number of claims that were paid back that were not legitimate claims,” Daniels added.
Daniels left Lloyds in 2011. He claimed that in the early days of the PPI review a large number of claims had simply been paid back to consumers “on an industrial scale” because that was easier.
Despite tough questioning Daniels said: “I believe in the great majority of cases customers did receive a good sales product, received a product that fitted them and received a good outcome.”
He denied that Lloyds’ pay structure incentivised PPI mis-sales although he admitted that staff received more points when they sold more.
“The average salary of a member of branch staff who sold PPI was £20,000. The average bonus for those people was 10 to 15 per cent of that.
“Lloyds is not an investment bank, we do not pay telephone number bonuses. We believe outsized bonuses can distort behaviours.”
He said he believed Lloyds’ set up “did not distort behaviours”.
“Lloyds embraced treating customers fairly as a principle. Violating a customer’s trust is antithetical to building a business. We took extraordinary steps to ensuring our people were trained well,” said.
Mr Daniels said loans did not offer customers a high return and even though that improved when a PPI police was added “it was still not a high return”.
“We are looking at a point in time in a fairly partial fashion,” he said. “We were living in a very benign economic time. You would see the returns from that product go down at a time like now when unemployment is rising.”
- 3 Russian girl takes her own life after parents find pornography on her computer
- 4 Ball pool for adults opens in London
- 5 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
Michelle Obama highlights harsh restrictions faced by Saudi women after meeting King Salman without wearing a headscarf
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Kim Kardashian on Bruce Jenner's 'story': 'We support him no matter what, and I think when the time is right, he'll talk'
Russian girl takes her own life after parents find pornography on her computer
Ball pool for adults opens in London
9 reasons Greece's experiment with the radical left is doomed to failure
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...