Lloyds customer receives PPI payment of just 3 pence

Lloyds Banking Group has insisted it followed industry guidelines in awarding just 3p to a payment protection insurance (PPI) claimant.

Former Lloyds Bank customer Bob Haywood, who put in a claim after being informed he had PPI between 2005 and 2007, intends to frame his compensation cheque as "a symbol of pointlessness".

Mr Haywood, a reporter with the Birmingham-based Sunday Mercury, wrote in the newspaper: "To make a farcical situation even more comic, I was told that the 3p was taxable and that I owed Her Majesty's Revenue and Customs the princely sum of 0.015p."

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In a statement, Lloyds Banking Group said: "We remain committed to resolving PPI complaints and treating our customers fairly to ensure that they haven't lost out.

"We follow industry guidelines to calculate any PPI redress payments to put the customer back into the position they would now be in if they hadn't taken out the PPI policy."

Mr Haywood, who was told that the payment related to PPI on credit cards between 2005 and 2007, added: "I never expected to make a fortune but I honestly thought I might be offered more."

The low payout was explained to My Haywood as being due to a zero balance on his cards, meaning PPI premiums were not debited.

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