Lloyds TSB customer receives PPI insurance pay out of 3p

Bob Haywood now owes HMRC 0.015p in tax

A Lloyds Bank customer has received what might be the lowest payment protection insurance (PPI) compensation pay out ever – a cheque for 3p.

Bob Haywood, a journalist at the Birmingham Mail, said he had never imagined a big payout: “In my mind, I knew the pay out – if there was to be a pay out at all – was unlikely to fund a Caribbean cruise,” Haywood wrote in a detailed account of his experience with the bank.

He imagined a tidy sum of £100 to £200. “But there it was in black and white: I was 3p better off.”

To make matters worse, the reporter’s haul is taxable. So he owes Her Majesty’s Revenue and Customs 0.015p.

Instead of taking the cheque to the bank, Haywood plans on framing it, “as a symbol of pointlessness, a total waste of time and as an epitaph to Britain’s barmy banking industry.”

Haywood was, he wrote, invited to submit a PPI claim when Lloyds LSB became Lloyds TSB, though he did not remember taking out PPI.

After what he described as a “45-minute interrogation about my lifestyle and financial circumstances,” the Lloyds investigator said he had been sold PPI between 2005 and 2007.

“It turns out that during this particular two-year period I had a Lloyds credit card, there was a zero balance on the account,” he wrote. It transpires that PPI premiums were only debited from customers’ accounts if they went into debit.

The payment of three pence was, the letter Haywood received said, to “put you back in the position which you would have been if you had not purchased the policy.”