Another massive banking fine

When you thought the fines had grown large enough Lloyds is hit by £28,038,800 fine for serious sales incentive failings.

When you read the details it beggars belief how anyone passed this through Compliance or even used the slightest modicum of common sense to think it was remotely acceptable.  In fact it highlights a moral vacuum at the heart of Britain's largest UK retail bank that every customer should shudder with contempt at the way they have been treated.  I suppose we are no longer shocked at the contempt the banks have had for their customers and the wider public and let us hope that they embark on wholesale reform and radical cultural change.

Since when was 100% failure translated into just 2%?  This is what they were doing such that selected files that failed their suitability criteria but were simply put against total sales by that individual assuming the rest must be fine so 2 out of 2 became 2 out of 100 resulting in a pass.  Either they were completely stupid and ignorant or they deliberately set out to devise a scheme that could not fail.  Maybe it was just incompetence.

In other examples their punitive demotion scheme that forced advisers into desperate measures selling policies to themselves, their colleagues and family just to meet the threshold at the end of the month.  The adviser was disciplined but the real culprit should have been the senior management team that signed off such a flawed scheme.  You can hardly blame individuals for desperately trying to protect their livelihoods when leading bankers pocket millions of pounds in bonuses then let the shareholders pick up the cost of any fines or sack the employees that are victims of such a pernicious regime.

I hope the lessons have been learnt but we do seem to come round time and again to the same old ineptitude that seeks to circumvent any system invented to ensure good customer outcomes.  Conduct risk management has never been so good.

Published: December 2013
By: Anthony Smith

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