Deloitte Denies It Was Fired by Lloyds for Complaint Mishandling

Deloitte LLP denied it was fired by Lloyds Banking Group Plc (LLOY) to run a call center handling payment protection insurance complaints because it had mishandled customers’ grievances.

Britain’s biggest mortgage lender said in a statement today that the contract ended after it “became aware of issues” at the center, which processed complaints by clients who said they had been improperly sold the loan insurance. It followed a report in The Times newspaper that call center employees had been trained to discourage customers from claiming compensation.

Deloitte said the termination was “unrelated” to press articles and that it had been notified of the intention to end the contract in May when the London-based bank decided to move to two from three suppliers. “We provided a high level of service throughout the period,” the accounting firm said in an e-mailed statement.

Lloyds has set aside more than 6.7 billion pounds ($10.4 billion) to compensate customers sold PPI, more than any other U.K. bank. Chief Executive Officer Antonio Horta-Osorio, 49, said last July that more than half of claims received from some claims-management companies, which help individuals pursue cases against firms for a fee or percentage of any successful award, were linked to insurance policies that didn’t exist.

Initial Rejection

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

Deloitte processed customers’ claims “in accordance with the bank’s policies and procedures,” it said in the statement.

Employees at the call center are being retrained by a new company, London-based Lloyds said in the statement. Some of the comments made to The Times didn’t reflect the bank’s training standards or policies and were “isolated” and are being addressed, the bank said.

Regulators have ordered U.K. banks to compensate clients who were forced to buy, or didn’t know they had purchased, insurance to cover repayments on credit cards or mortgages they were taking out.

To contact the reporter on this story: Gavin Finch in London at gfinch@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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