£28m fine imposed on Lloyds For Sales Incentive Scheme
A fine of £28m was imposed on Lloyds Banking Group for "serious failings" which rewarded sales staff with 'grand in your hand' bonuses, even at times products they sold to consumers were believed to be unsuitable.
The Financial Conduct Authority (FCA) said the penalty was the biggest which has ever been imposed against a retail banking operation.
FCA took a look at Lloyds TSB, Bank of Scotland (BoS) and Halifax between 2010 and March 2012 - a period when it became clear that Lloyds was particularly exposed to the separate payment protection insurance mis-selling scandal.
The regulator said the bonus schemes at the heart of its inquiry put pressure on sales staff to hit targets relating to investment products. In a case that was revealed, an adviser was found to have sold insurance products to himself, his wife and a colleague to avert himself from being demoted.
The FCA said the bonus schemes had worrying "higher risk" features. This scheme offered the possibility of an automatic promotion and pay rise or salary cuts of up to 50% if given targets were not met.
Lloyds Banking Group - which has since split the TSB operation into a separate brand - responded to the penalty by apologising.
New Zealand News
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