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Last Updated: Monday, 19 July, 2004, 11:06 GMT 12:06 UK
Lloyds TSB 'broke code on loans'
Lloyds TSB
Lloyds TSB admits it broke the Banking Code
Lloyds TSB bank loaned a couple on benefits 20,000 even though they could not afford to pay it back, a BBC documentary reveals.

A large proportion of the money borrowed was to cover loan insurance to protect the couple if they lost their jobs - when neither was in work.

The group admits the loan, granted by a branch in Burton-upon-Trent, Staffordshire, broke the Banking Code.

Banking regulators are now looking at the investigation by The Real Story.

In another case at the same branch, a man claimed he was encouraged to take out a loan with insurance which he "did not really need" as he was unemployed.

'Cowboy' behaviour

Lloyds TSB later repaid 6,000 racked up in payment protection insurance and interest by the man.

The programme claims to have identified similar cases at other Lloyds TSB branches around the country.

You would expect this sort of behaviour from a cowboy, from a back street broker or a loan shark
Iain Macqueen-Sims
Loans expert

"You would expect this sort of behaviour from a cowboy, from a back street broker or a loan shark.

"One would not expect this from a major high street bank," independent consumer loans expert Iain Macqueen-Sims told the programme.

The documentary says the banking authorities are now considering what action to take.

A Lloyds TSB spokeswoman said the bank admitted it had not done everything it could under the code in the case of the couple.

But she said the bank was committed to being a responsible lender and that both cases concerned loans issued more than two years ago.

"In both cases we have interacted with the Citizens Advice Bureau to review the circumstances and agreements to repay the customers were made long before any involvement from the BBC," she added.

Real Story: BBC One, Monday 19 July 2004, 1930 BST and live on the Real Story website.


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