LONDON (Reuters) – Britain’s biggest domestic bank Lloyds has been fined 64 million pounds ($81.2 million) by the Financial Conduct Authority for mistreating hundreds of thousands of mortgage customers in financial difficulties.

Lloyds and its Bank of Scotland and The Mortgage Business units were also in the process of paying around 300 million pounds in redress to 526,000 customers, the FCA said in a statement on Thursday.

The fine is the largest imposed by the watchdog for mortgage-related failures, and would have been 91.5 million pounds had Lloyds not agreed to accept the watchdog’s findings early on.

The hefty penalty comes at a sensitive time for Lloyds, which along with rival banks has millions of customers struggling to make ends meet in the coronavirus pandemic, with many taking repayment holidays on mortgages.

“By not sufficiently understanding their customers’ circumstances the banks risked treating unfairly more than a quarter of a million customers in mortgage arrears, over several years,” said Mark Steward, the FCA’s executive director of enforcement and market oversight.

Between April 2011 and December 2015, the banks failed to help customers who were vulnerable, the FCA found, due to marital splits, the death of a spouse, loss of a job, and in one case, when a family member had gone missing.

Some of the failings were identified in 2011 but were not rectified. A sample of 100 customer files from 2014-15 found unfair treatment in over a third of them.

Lloyds said that all customers affected have already been contacted and reimbursed, and that customers need to take no action.

“We have since taken significant steps to enhance how we support mortgage customers experiencing financial difficulty, including investing in colleague training and procedures,” Lloyds said in a statement.

The watchdog warned all lenders that the hardship faced by them during the COVID-19 pandemic “only heightens the importance of firms treating customers in financial difficulty fairly and appropriately”.

($1 = 0.7878 pounds)

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