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Deloitte caught up in Lloyds PPI scandal

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12th Jun 2013
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Deloitte has denied being sacked by Lloyds Banking Group to operate a call centre handling payment protection insurance (PPI) complaints after it failed to deal with customers grievances properly.

Deloitte told AccountingWEB that the termination was unrelated to recent press articles and that it had been notified of the intention to end the contract in May when the bank decided to move from three suppliers down to two.

“In processing claims in accordance with those bank policies and procedures, we provided a high level of service throughout the period,” the Big Four firm said. “To our knowledge the conclusion of the contract is unrelated to matters reported in recent press articles.”

Following a report in The Times, which said call centre staff had been trained to “play the system” and discourage customers from claiming compensation, Lloyds ended the contract with Deloitte.

According to an undercover reporter on The Times, a trainer told new workers that sales advisers had sometimes ticked a box indicating borrower’s acceptance of PPI coverage without clients’ knowledge. Workers were also told most customers would give up pursuing complaints after an initial rejection.

Lloyds said in the statement that employees at the call centre are being retrained by a new company, and that some of the comments made to The Times didn’t reflect the bank’s training standards or policies.

More than any other UK bank, Lloyds has set aside more than £6.7bn to compensate customers sold PPI to cover repayments on credit cards or mortgages they were taking out.

In February the bank was fined £4.3m by the Financial Services Authority for not settling PPI claims promptly.

Earlier this week Lloyds Banking Group came under fire again for breaching Financial Conduct Authority guidance on the offer of compensation for interest rate swaps mis-selling.

The bank was forced to withdraw its offer of redress to a business when the FCA found it tried to substitute the original hedging product for an alternative.

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