Watchdog urged to curb mis-selling by bank branch staff

 

The chairman of a powerful committee of MPs has signalled he would be talking tough to the City regulator about high-street banks using pay structures in their branches that encourage bad selling by staff.

Lloyds was fined £28m last year for its aggressive bonus structure which meant workers could be demoted for not shifting enough financial products to their customers. One desperate employee resorted to selling products to himself, his wife and a colleague in order to hit his targets.

Andrew Tyrie, chairman of the Treasury Select Committee, said last night: “Incentives have been deeply misaligned for significant numbers of front-line staff, not just highly remunerated traders or the most senior executives. Deep cultural change is needed.”

Ahead of what could be a tempestuous meeting between the committee and Financial Conduct Authority chairman Martin Wheatley tomorrow, Mr Tyrie sent the watchdog a letter saying it was “now crucial” that the regulator carries out recommendations from the Banking Commission to curb sales-based incentives in high street bank branches.

“So far, the FCA has shown little enthusiasm for taking such action. Following the record fine levied against Lloyds, it should reconsider,” he said. “Unless such issues are addressed now, the risk of conduct failure at some point in the future can only increase.”

The issue highlights how far Lloyds’ chief executive, Antonio Horta-Osorio, has to go to improve the reputation of his giant retail bank. This week sees him attempt to seize the initiative with a four-pronged blitz of populist policies.

His most ambitious is to change the gender make-up of his senior tiers of management. Where currently only 28 per cent of his top 5,000 staff are women, he wants to have 40 per cent by 2020. That means reworking the group so that 600 more women are in its top ranks.

He also plans to increase from 60,000 to 80,000 the number of first-time buyers to whom it lends mortgages and increase its net lending to small and medium businesses by £1bn.

The fourth prong involves donating more to charity.

Meanwhile, he is negotiating to pay the bank’s first dividend since the financial crisis.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
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

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?
Season's finale brings the end of an era for top coaches and players across the continent

The end of an era across the continent

It's time to say farewell to Klopp, Clement, Casillas and Xavi this weekend as they move on to pastures new, reports Pete Jenson
Bin Laden documents released: Papers reveal his obsession with attacking the US and how his failure to keep up with modern jihad led to Isis

'Focus on killing American people'

Released Bin Laden documents reveal obsession with attacking United States
Life hacks: The innovations of volunteers and medical workers are helping Medécins Sans Frontières save people around the world

Medécins Sans Frontières's life hacks

The innovations of volunteers and medical workers around the world are helping the charity save people
Ireland's same-sex marriage vote: As date looms, the Irish ask - how would God vote?

Same-sex marriage

As date looms, the Irish ask - how would God vote?
The underworld is going freelance: Why The Godfather's Mafia model is no longer viable

The Mafia is going freelance

Why the underworld model depicted in The Godfather is no longer viable