Press Release
Financial Services Authority warned of further mis-selling scandals
31 October 2012
A culture of target driven sales in high street banks is failing customers and could lead to another mis-selling scandal warns Britain's largest union, Unite, in a submission today, to the Financial Services Authority (FSA) .
The warning, in a response to the FSA's consultation on risk and incentive schemes, comes on the same day, as Barclay's reported a quarterly loss of £47 million which was partly driven by a £700 million 'hit' to cover mis-sold PPI claims.
Responding to the consultation which ends today, Unite calls on high street banks to follow the lead of the Co-operative Bank and Barclays by scrapping sales bonuses for customer facing staff and replacing them with rewards for good customer service.
In its submission the union, which represents 130,000 workers in the UK finance sector, highlights instances of pressurised sales environments and how in one bank, eight in ten workers suffer from stress due to unrealistic targets, the unremitting pressure to perform and insufficient time to do their job.
With a significant proportion of workers in the banking sector relying on bonuses to top up their low wages, the submission goes on to show how:
Banking staff are faced with performance improvement plans, the threat of a disciplinary, or in extreme cases, dismissal for failing to achieve sales targets.
In one large retail bank products being sold on a points basis with points leading to 'mystery prizes' for staff.
In one high street bank if there aren't enough customer financial planning meetings scheduled by the end of every Wednesday, then staff had to stay behind to 'fix' the diary.
Bank workers being asked to make 'service' calls to people registered under the Telephone Preference Service (TPS), despite raising concerns that it they could be in breach of TPS guidelines and seen as prospecting for business.
The submission concludes by calling for worker representation on remuneration committees of the banks to bring an end to the target driven sales culture and a more customer focused approach.
Gail Cartmail, Unite assistant general secretary, said:“The short term, 'quick buck' culture, which fuelled the financial crisis, is alive and well in some of the boardrooms of our high street banks.
“The target driven sales culture, where the performance of ordinary bank workers is judged on achieving sales targets, rather than meeting the needs of customers is unsustainable and could lead to another mis-selling scandal.
“Today's figures from Barclays show the cost of putting sales before customers. Barclays has recognised this and along with the Co-operative Bank has started rewarding staff for customer service rather than sales.
“The FSA needs to press the other high street banks to follow suit to ensure we have a retail banking sector that is driven by what is best for the customer and not arbitrary sales targets.”
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