Insurance staff at Lloyds Bank accidentally sent letters intended for customers to the bank’s own offices as part of a series of blunders.

The bank has agreed to pay back nearly £96,000 to more than 10,000 customers who were not kept properly up to date about their payment protection insurance (PPI).

Among 18 breaches listed by the competition watchdog, the bank’s officers had sent letters meant for 12 customers to its own branches after a computer error.

Meanwhile, Nationwide had also breached an order from the Competition and Markets Authority, the watchdog said.

The building society failed to send the right paperwork to more than 3,000 customers, according to the CMA.

People could end up paying for insurance they no longer need

The watchdog detailed a litany of failures at Lloyds, which it said “could have harmed customers’ interests”.

PPI providers must send annual reviews or reminders to customers about the plans they are paying for, so they know they are entitled to cancel the plan.

The reminders also let customers know they can change to a different provider of PPI and allow them to compare the price to other plans.

On orders from the CMA, reviewers found 18 separate breaches at Lloyds and one at Nationwide.

The watchdog also ordered Cardif Pinnacle, a pet insurance subsidiary of BNP Paribas, to run an independent audit of its PPI processes.

Since 2012, Cardif Pinnacle has sent more than 14,800 inaccurate reminders to 7,400 customers, 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,” said CMA senior director Adam Land.

“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.”

Ten Lloyds customers did not get a review of their mortgage PPI for eight years, while 17 were not sent one for seven years.

Other reviews contained inaccurate information.

All three insurance providers have said they have or will write to customers to apologise.