Union informs FCA over Lloyds Bank's sales tactics

Lloyds Trade Union has written to the Financial Conduct Authority (FCA) informing it of its concerns over Lloyds Bank staff being put under pressure to ply customers with 'back door' sales tactics in branches, despite the bank claiming it has stamped out the pushy sales culture. The FCA has not commented on the letter or confirmed it is scrutinising the bank's tactics; Lloyds says in a statement: "The Group does not have sales targets at a branch or colleague level, nor is a colleagues pay or bonus linked to product sales." Lloyds Bank was fined over £28m in 2013 by the FCA over failings in its controls over sales incentive schemes.

Lloyds Bank staff warn they are under pressure to ply customers with ‘back door’ sales tactics in branches, with one trade union writing to incoming chief executive of the Financial Conduct Authority, Andrew Bailey, voicing concern.

This is Money is still being contacted by senior branch staff members across the country who are facing pressure to push products on customers, despite the bank vowing in the past to stamp out the pushy sales culture.

We have seen an internal document titled 'minimum competency standards' which appears to show how staff members are expected to sell one of each product in branch every single month.

Back door: Staff members at Lloyds Bank have told This is Money they are still facing pressurised sales targets through the back door

Although some of these measures may be simple to achieve, others are much tougher, for example selling insurance or wealth management to a customer.

A whistleblower, based in the North, told us that over a three-month rolling period, an adviser needs to hit as many of these measures as possible.

Less than six and they are removed from the role and put on a coaching plan. If after three months the situation has not improved, the plan goes formal, and there is a risk from that of the adviser being sacked.

The document is published below:

Targets? This crib sheet - which lists products on the left and months on the top - is filled with yes and no boxes, depending on what has been opened by a staff member. Three months without sales turns the box blue

He said: 'This is obviously unacceptable pressure, which can force advisers to push products that are not in a customer's best interests.

'The bank is saying that having minimum competencies shows that we can evidence to the Financial Conduct Authority that our advisers are compliantly meeting customers needs.

'However, the reality is, they are being used as a stick to bash advisers over the head with, and are forcing advisers to openly target specific products purely for "compliance" purposes, and not customer need, which, quite simply is not acceptable.'

These concerns have been echoed by the Lloyds Trade Union. It says that 'minimum competency standards' are an area of concern which comes up constantly among its members.

It describes the language used by the bank as 'Orwellian doublespeak' which 'belies the reality of what happens in branches every day.'

The LTU says: 'Minimum competency standards are targets by the back door. By forcing staff to push particular products in order to avoid the performance improvement process, the bank is putting customers at risk of getting products they don't need.

'Staff don't want to do it but what choice do they have? We are not aware of any other bank that uses minimum competency standards.'

As a result, the LTU has written to Mr Bailey - who will take up his position shortly - saying: 'Our primary issue with the bank's minimum competency standards is that by forcing staff to push particular products, with the performance improvement process sword hanging over them in case they don't, customers could be at risk of being sold products they don't need or can't afford.

'So in simple terms, the current use of minimum competency standards by Lloyds Banking Group breaches principle 3 of the FCA's principles for business which states that: 'a firm must take all reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems'.

On its radar? The LTU has written to new FCA chief executive Andrew Bailey to voice its concerns

Another whistleblower, based in the South West, says these minimum competency standards are targets that exist 'under the radar.'

He says they use the table of sales – which automatically update when a branch member sells a certain product – as a weapon to scare staff into selling.

Both whistleblowers say that if it is reaching the end of a month and a certain product hasn't been sold by an adviser, they will try harder to push them.

One adds: 'Morale is low, no one knows if they will have a job next year with branch closures. No one likes the hidden sales culture.

WORK AT A BANK? Do you currently work at a bank and concerned about the way it goes about its business? Do you work in a Lloyds branch - do you feel under pressure, or do you find it a good employer? Get in touch with confidence: lee.boyce@thisismoney.co.uk

'In December, the union stated that most people still believe Lloyds is all about sales. There is still pressure to see 25 customers each week.'

The first whistleblower says these standards are now also being forced on under-pressure branch managers.

He said: 'Branch managers spend the majority of their time serving on the counter because of lack of staff, so simply do not have the time to interview customers in the quantities required to hit these minimum standards, so there is a lot of worry around minimum competencies among us.

'I know of colleagues who are threatening to be signed off with stress if they are put on coaching plans, emotions that I fully understand. Minimum competencies are a slap in the face to all hard-working bank managers within Lloyds.'

The FCA didn't want to comment on the whistleblower claims or LTU letter - nor would it confirm it is keeping a close eye on Lloyds branch tactics.

A Lloyds Bank spokesman said: 'The Group does not have sales targets at a branch or colleague level, nor is a colleagues pay or bonus linked to product sales.

'As a customer-focused business we expect our colleagues to spend time with customers and show knowledge and expertise when helping them.

'It is therefore important that we have a way of ensuring that colleagues are competent and properly equipped to meet the needs of our customers.

'Competency standards are designed to ensure that a colleague maintains product knowledge by evidencing a customer need has been met on a rolling three-month basis. This is not a sales target and can be met by passing a product knowledge test as an alternative.'

It added that there is no expectation that every type of customer product need will be met every three months, that it is about 'demonstrating capability to meet different types of customer needs on an ongoing basis'. Failing this test does not directly affect variable pay, but is considered from a 'risk perspective' as part of their performance.

The high street bank also pointed out that it works closely with its recognised unions - Accord and Unite - when it made changes at the end of last year and it says the response has been positive.

This is Money has long investigated the sales pressure and tactics in banks across Britain. The majority of high street banks seem to have binned them altogether.