Lloyds TSB has still failed to clear a massive backlog of unpaid PPI compensation, leading to more anger from mis-selling victims.
Some have waited over 90 days, and counting, since receiving confirmation of how much they'll get back. Often, victims are owed thousands of pounds each.
One unemployed customer who contacted us says she's waited for weeks for £16,000 and is desperate for the cash to live off.
The problem first emerged over a month ago when we revealed the Government-backed bank was often failing to meet a 28-day deadline after agreeing a redress sum, to then pay the money (see the Lloyds PPI delays MSE News story).
The cut-off is not in the rule-book but is a gentleman's agreement between sellers of PPI – to cover loan or credit card payments if you cannot work.
Lloyds said at the time many may not get their cash for approximately 56 days after an offer – double the intended wait – due to the huge backlog of claims.
But even that seems a grossly underestimated time-frame for many.
Complaints have been flooding in to our forum on the latest delay. For instance, partner99 wrote a few days ago: "My offer letter was 67 days ago and still waiting!!!!"
Meanwhile, Cgray said: "90 flaming days since offer letter! So 28 or even 56 days is a joke."
While Lloyds insists it has cleared some of the backlog, it says the extra delay largely affects those who have yet to pay off the loan the PPI was attached to.
It says once PPI is removed, the loans need to be restructured, which creates extra complications.
Lloyds refuses to state how many payments are held up by these extra delays, only adding: "Of the complaints to be processed, fewer than 5% are affected by this issue on delays."
Given Lloyds was the biggest seller of PPI, the problem is likely to affect a significant number of customers.
Its parent company Lloyds Banking Group set aside £3.2 billion to pay claims, far more than any other provider, as part of an estimated £9 billion likely to be owed by all PPI sellers after banks were defeated in a legal bid to block payouts earlier this year.
Additional compensation promised
The silver lining to those who face delays is they may get extra redress.
The Financial Ombudsman Service, which arbitrates in disputes between banks and their customers, says providers must pay any interest due on compensation up to the point of payment.
Lloyds confirms it will make those interest payments and offer additional redress "on a case-by-case basis".
So those whose payments take over 28 days after an offer should make an extra claim.
Martin Lewis, MoneySavingExpert.com creator, says: "Banks claim they want to rebuild trust – it's about time they started being trustworthy.
"This delay adds insult to the injury caused by mis-selling these products, and in some cases lying to their customers.
"In these crunch times, people need money back to help make ends meet. Dangling the carrot of cash and not delivering is cruel.
"At least Lloyds has owned up – compensation for delay should be standard for the industry and a meaningful amount."
Other bank delays
Barclaycard and RBS/Natwest customers have also reported similar delays, though the number complaining has tailed off over recent weeks.
Both banks say they have virtually cleared the backlog.
Lloyds Banking Group stresses customers of its other brands – which include Bank of Scotland and Halifax – are not affected by the delays.
Barclays, HSBC and Santander say they all comfortably meet the 28-day deadline.
A Lloyds TSB spokeswoman says: "The delay affecting these customers is due to the nature of their case which is more complicated than the majority.
"We would like to apologise to those customers affected for the inconvenience they have experienced.
"For those customers affected by delays, we have allotted additional resources to clearing these cases and we are working our way through them as fast as we can."