PPI providers are required to send annual reminders to customers setting out how much they’ve paid, the cover they have, and their right to cancel a policy.

However, the Competition and Markets Authority (CMA) said Lloyds failed to send reminders, or sent reminders containing inaccurate information, to more than 10,000 customers.

This isn’t the first time Lloyds has breached the PPI order. In total, it has breached this order 18 times since 2012, with the last discovered in 2018 following an audit.

In 14 of the breaches, Lloyds failed to send annual reviews to 4,950 PPI customers within 14 days of the anniversary date, and in four of the breaches Lloyds included incorrect information or failed to provide information to 5,537 PPI customers. The CMA said some of these breaches were small, affecting only one customer, while others affected thousands.

Lloyds has paid out £96,000 to date and is in the process of refunding those who would have cancelled their policy had they received an accurate reminder.

Nationwide’s PPI breach

Nationwide’s further “disappointing” breach affected 3,053 mortgage PPI customers over a four-month period. The mutual was found to have failed to provide annual reminders by 1 February 2020, meaning some customers may not have been aware they still had PPI.

The last time it breached the PPI order was in 2019. Nationwide is now contacting affected customers to apologise and is offering a refund of their PPI payments for 2020 if they want to cancel their policy. They must request a refund by 31 August 2020 and the refunds will also come with 8% compensatory interest.

The CMA has also ordered Cardif Pinnacle, part of global banking group BNP Paribas, to appoint an independent body to audit its PPI processes. It comes as it was found to have sent more than 14,800 inaccurate reminders to 7,400 customers since 2012. Apology letters are being sent out, along with details about customers’ right to cancel at any time.

Adam Land, senior director of remedies, business and financial analysis at the CMA, said: “If providers fail to send important information on PPI policies, people could end up paying for insurance they no longer need. Not having this information also makes it harder to look around for a better deal.

“That’s why we continue to act when we see PPI providers breaking the rules. We’ll be keeping a close eye on these firms – and others in the sector – to make sure they treat their customers fairly.”

What do the banks say?

A Lloyds banking group spokesperson, said: “We are very sorry that a small number of customers did not historically receive the correct information in their annual PPI statements. Although customers were charged the correct premiums for their policies, we appreciate that the information may not have allowed them to accurately compare policies across the market. Where appropriate we have proactively written to customers to apologise and provide the correct information.”

Sara Bennison, chief product and marketing officer at Nationwide Building Society, said: “Unfortunately, a technical error meant the Society failed to send out the Annual Review Statements to mortgage PPI members earlier this year. The Society has rectified the issues and has now provided them with their Annual Review statements. We apologise that we fell below our usual high standards and have written to members to offer redress for those who wishing to cancel their policy.”

Cardif Pinnacle has been approached for comment.