It is known in the marketing circles that banks do sell their products by cheating customers( this is the meaning of all jargon as used like misrepresentation, misselling).
But the Bank goofed up in on its strong points ,accounts.
Lloyd’s bank has been caught paying staffers who were misselling, 4 out of 10!
Beware and do not invest unless you understand,ask the marketing people to speak plain English and more importantly do not invest in anything that can yield more than 24% / as of now.
Credit Card companies are guilty of this on a regular basis.
Story:
The staggering extent to which high street bank staff chasing bonuses and commission are routinely ripping off customers was laid bare in a scathing report yesterday.
At the same time, the Daily Mail can reveal that 40 per cent of staff at Lloyds Banking Group earn extra payments if customers are persuaded to buy additional financial products.
They get bonuses if they can entice millions of loyal account holders to fork out for costly insurance policies or ‘premium’ current accounts which charge a monthly fee.
Separately, in a report by the Financial Services Authority regulator, published yesterday, account holders were said to be viewed only as ‘sales targets’ exploited by ‘pile it high and sell it quick’ tactics that verge on the criminal.
Banks were told to clean up their act or face a major clampdown.
The FSA’s report into the incentive payments has brought another day of shame for Britain’s financial industry.
It revealed that one firm has been referred to its Enforcement and Financial Crime Division. Sources named the bank as Lloyds, which is 41 per cent owned by the taxpayer.
“Anrgy: FSA boss Martin Wheatley says: ‘Financial institutions have changed their view of consumers from someone to serve to someone to sell to”
Ruthless salesmen were said to be so desperate to meet sales targets that they even sell to family members such as their elderly mothers or sisters.
Others were found guilty of colluding to ‘intentionally overcharge’ a customer to trigger a bonus payout. The report said that some firms pay a ‘Super Bonus’ of up to £10,000 to the first 21 workers who meet a sales target.
In other cases, staff are not paid a basic salary, which means their own financial survival depends on their ability to sell, a situation the report warned ‘significantly’ increased the risk of mis-selling.
Yesterday Martin Wheatley, of the FSA, said: ‘Some time ago, financial institutions changed their view of consumers from people to serve, to people to sell to.’
He read the riot act to the industry – which also includes insurers and investment firms – telling companies to ‘clean up their act’ or face a clampdown in the next 12 to 18 months.
Firms can continue to pay commission, but such payments must benefit the customer, not the salesmen.
‘It has been too easy, for too long, for those selling or giving advice to be motivated solely by the rewards on offer to them, rather than how to enrich their customer,’ he said.
‘We all know what it is like to walk into a bank to do something simple, like paying a credit card bill, only for the person behind the counter to ask if you would like to extend your credit, take out more insurance or look at their competitive mortgage rates?’
He warned some of the mis-selling was ‘very close to fraud, which is a criminal offence’
The scale of the mis-selling is shocking in an industry which provides products essential to the lives of millions.
Of the 22 firms investigated by the FSA between September 2010 and September 2011, 20 were found to have ‘features in their incentive schemes that increased the risk of mis-selling’.
The report highlights one salesman ‘blatantly misleading’ a customer to scoop £1,000.
In another case, two salesmen ‘colluded to intentionally overcharge’ a customer because the bonus was linked to the amount that the client had agreed to pay for the product.
Yesterday the Financial Services Consumer Panel criticised the FSA for being ‘slow to respond’ to a problem which has existed for decades.
Chairman Adam Phillips said: ‘The regulator has made a commitment to change the industry’s behaviour. We hope that this time the industry will get the message and not try to find a way to get around the rules as they have done in the past.’
Lloyds Banking Group said it had made significant changes to its incentive schemes this year, adding: ‘Today these schemes reward staff for providing high quality customer service, assessed by a wide range of metrics.’
But it confirmed that around 40,000 of its 100,000 staff were eligible for incentive schemes.
Leave a Reply