Lloyds bank has been rapped by regulators for failing its customers in a new PPI scandal.
It forgot to send 14,060 people with payment protection insurance an annual statement detailing their costs and their right to cancel their policies.
In another 2,884 cases it miscalculated the amount customers had paid up when sending the statements out.
This meant many had no idea how much they were spending on PPI policies, and some may not even have realised they were still paying for one.
Lloyds forgot to send 14,060 people with payment protection insurance an annual statement detailing their costs and their right to cancel their policies
Lloyds, which as so far set aside £18.7billion to compensate customers who were mis-sold PPI, has now been formally reprimanded by the Competition and Markets Authority (CMA), and ordered to sharpen up its act.
The bank was already on thin ice after it admitted two years ago that it had made mistakes in issuing statements.
CMA chiefs have warned Lloyds they will take it to court unless it puts proper policies in place to prevent this happening again.
It took similar action against Barclays two months ago.
Adam Land, senior director of remedies at the CMA, said: ‘We are disappointed that Lloyds has again failed to provide these important reminders or provide accurate data to its customers.
‘These are serious breaches and, as we did with Barclays in August, we are issuing Lloyds with legal directions which can be enforced by a court to ensure they comply.
Following a series of breaches, we’re now requiring legal assurances from Lloyds that they have measures in place to prevent similar breaches from ever happening again.’
Lloyds’ mistakes were caused by IT problems, and affected customers with PPI policies between 2012 and this year.
The bank has now started sending letters of apology, reminded affected customers they have a right to cancel, and offered to refund their premiums.
No customers have been overcharged and it will not cost Lloyds any extra money.
A spokesman for the lender said: ‘We are writing to a small number of credit card customers.
Whilst we have resolved the cause of the issue, we are extremely sorry for any inconvenience caused.’
He added: ‘We will be contacting all affected customers.’
Lloyds was the biggest culprit in the PPI mis-selling scandal which saw millions of customers flogged credit card insurance that they did not want or could not use.
The bank has since had to set aside £18.7billion for compensation.