Category: News
Date: 19.07.2004
Printable version
Lloyds TSB has admitted that it broke the rules governing how banks
behave - the Banking Code - following an investigation by Βι¶ΉΤΌΕΔ ONE's
Real Story into the mis-selling of loans.
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The banking authorities are now deciding what sanctions to take.
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The programme (Βι¶ΉΤΌΕΔ ONE, Monday 19 July, 7.30pm) follows the case of
Julie and Kevin Davis - a couple who were loaned Β£20,000 by Lloyds
TSB despite living on benefits.
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The couple had walked into the bank with debts of around Β£4,000
and were repeatedly encouraged to take out consolidation loans they
could not afford.
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A large proportion of the money they borrowed was to cover interest
and the cost of loan insurance, which would protect the loan if the
couple lost their jobs. However, at the time the insurance was sold
the couple didn't have jobs.
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Iain Macqueen-Sims, an independent consumer loans expert, tells the
programme: "You would expect this sort of behaviour from a cowboy,
from a backstreet broker or a loan shark. One would not expect this
from a major high street bank."
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In another case followed by the programme, a blind unemployed man
tells how he was encouraged to take out loans weighed down with payment
protection insurance (PPI).
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In fact, nearly a fifth of his final loan was just the accumulation
of PPI and the interest on it - an insurance he didn't really need because
he doesn't work.
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Both cases were from one branch of Lloyds TSB in Burton-on-Trent.
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But the programme found similar cases from a variety of banks scattered
across the country.
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During filming, Lloyds TSB backed down and refunded Β£22,000 to
Mr and Mrs Davis (by this time, the couple were Β£30,000 in debt).
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In the case of the blind man it refunded Β£6,000 - all of it PPI
and interest.
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Questioned by the Βι¶ΉΤΌΕΔ's Paul Kenyon, Lloyds TSB's
director of policy co-ordination and risk, John Spence, admits: "In
this case Lloyds TSB did break the banking code."
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Real Story with Fiona Bruce, Βι¶ΉΤΌΕΔ ONE, Monday 19 July at 7.30pm.
