On the warpath: Whistleblower Paul Moore on Lloyds Banking Group’s 'pathetic' £28m fine

As Lloyds is hit with a fine for mis-selling, whistleblower Paul Moore speaks out

Paul Moore, the celebrity whistleblower whose explosive evidence over HBOS led to the resignation of one of the City’s top bankers, is appalled.

Indeed, even Mr Moore, whose opinion of bankers is about as low as you can get, can’t believe the latest revelations that Lloyds Banking Group had devised another incentive scheme which led to the mis-selling of yet more dud products to customers.

“There’s no other word for it –I am appalled and Lloyds customers should be outraged. After everything that happened during the banking crisis, and all the talk about improving regulation by the regulators, it’s beyond belief that the Lloyds  board allowed such a scandal to happen again,” he says.

“And the regulators? Well, they were asleep at the wheel – again. They should have checked out the Lloyds incentive scheme too.”

Mr Moore also described the decision by the Financial Conduct Authority (FCA) to fine Lloyds £28m as “measly” and unlikely to act as a deterrent to future bankers.

In a devastating report published earlier this week, the FCA found Lloyds salesmen guilty of selling £2bn worth of products such as stocks and shares Isas and illness or income insurance cover to 700,000 or so customers of Lloyds, Halifax and Bank  of Scotland.

“This fine is pathetic and will not act as a deterrent for any bankers who have shown, time and time again, that they ignore such penalties because they don’t hurt. The fine should have been at least a quarter of the £212m revenue made from the mis-selling. That, together with the £28m, might make them think more seriously.

“Lloyds now faces a bill of at least £100m to compensate its customers who were mis-sold products between January 2010 and March 2012 in what has been described as a bonus-induced ‘grand in your hand’ selling frenzy by staff, with one salesman so frightened of losing his job that he sold himself a product to make up the numbers. What’s so astonishing is how Lloyds could have created such an incentive-scheme when what happened at banks like HBOS should have taught them how dangerous they are.”

The dangers inherent in bonus-based selling became obvious to Mr Moore while he was head of risk at HBOS from 2002 to 2005.

He was so worried by the sales culture that Mr Moore warned the board but was ignored and left with a non-disclosure agreement.

However, he was so incensed when HBOS collapsed and was rescued by Lloyds, he appeared before the Treasury Select Committee in 2009 with his bombshell of claims that he had warned the then Halifax chief executive, James Crosby, about the dangers of the bank’s rotten sales culture. His evidence forced Mr Crosby to resign as deputy chairman of the Financial Services Authority – now the FCA – and he lost his knighthood.

Yet what angers Mr Moore even more today is that still no one has been punished or charged for their actions.

“Why isn’t action being taken against the Lloyds risk or compliance officers involved. Why isn’t the regulator taking action against the board directors or the non-executives? And, why didn’t the regulator demand to look at any of the new incentives schemes being designed? There has been a total lack of oversight at every level.”

So far Lloyds has hinted the only redress will be to claw-back bonuses from past and current directors such as ex-boss Eric Daniels, former head of retail Helen Weir and possibly the current chief executive Antonio Horta-Osorio, who was running the bank for 12 months before the bonus schemes were stopped in March 2012.

“I find it difficult to see how Mr Horta-Osorio can wriggle out of this. He was in charge,” Mr Moore adds.

“Why does no one take any accountability? I’ve realised that it’s impossible to change the banking culture so the only way to change things is to compete with them.”

And that’s what the whistleblower has done. He’s set up a new, peer-to-peer lender, Assetz Capital, which has already lent about £10m to around 30 small businesses.

“We say we are replacing positively disgusting finance with positively disruptive finance. And it’s doing good – lending to companies for jobs and growth. And its simple and safe – I would even let my 87-year-old mother take out a loan or lend.”

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions