The Lloyds Banking Group is to refund 300,000 customers a total of £500m after admitting it caused confusion over its right to charge them more for their standard variable rate mortgages.
The payouts potentially affect those who took out Halifax mortgages between September 2004 and September 2007, before Halifax became part of the Lloyds Banking Group. The company has said that it will contact 600,000 customers to explain the terms of the standard variable rate cap and that goodwill payments will be paid to those who were paying SVR on their mortgage at the relevant time.
Lloyds has said that it has agreed the payments with the Financial Services Authority after admitting that the wording in the mortgage offer documents received by some customers “had the potential to cause confusion”. Some will receive a flat-rate payment of £250 whilst others will receive a much larger amount related to the rise in their interest payment and the size of their mortgage.
