Which? response to the FCA fining Lloyds Banking Group for ‘serious sales incentive failings’

In response to the FCA fining Lloyds Banking Group for ‘serious sales incentive failings’, Which? executive director, Richard Lloyd, said:

“It’s right that in this case the Financial Conduct Authority is taking strong action by imposing their largest fine. This should send a clear message to the banking industry that mis-selling won’t be tolerated and that customers, not sales, must come first.

“We now need to see the new professional banking standards body deliver a big change in banking culture across the industry, so that front line staff and their managers are not incentivised to sell products that customers don’t want or need.”

Background: 

Which? research of bank staff in 2012 who have a sales role and have sales targets revealed:

–      Almost half (46%) know colleagues who have mis-sold products in order to meet their targets

–      Four in 10 (40%) say targets drive employees to sell when it’s not appropriate

Of those who have a sales role (not all have sales targets):

–      Two thirds (64%) say they are always or sometimes told to sell more.

–      The most common reasons for being told to sell more were to hit targets (26%) and increase profits (16%); only 6% said it was because it was in the customer’s interest.

–      Nearly half (45%) sometimes feel they’re expected to sell regardless of whether it’s appropriate or not.

–      Four in 10 (38%) with targets have ‘power hours’ where they have to make a certain number of sales within a designated period of time.

–      Over a third (37%) are not comfortable with the level of pressure to sell in their role.

[ComRes interviewed 551 front line bank staff who have daily interactions with customers, by telephone between 22nd October and 4th December 2012. 371 respondents have a sales role, and of those 298 have sales targets. Respondents were selected from HSBC, RBS, Lloyds Banking Group, Santander and Barclays.]

Statement: , ,