This article is adapted from a piece written by Lee Boyce for the Daily Mail and published on 15 November 2012. I am re-blogging it because this article needs to be read by anyone who wants to understand how financial product fraud is perpetrated in High Street financial institutions. It is a scandalous article and I have included it on this blog because it is an important and vital piece of investigative journalism and because I believe it gives the lie to the constantly parroted assertions by the banks that they adopt fair and legal selling methods. It also helps to explain why the banks have been forced to set aside £15 billion to recompense customers who have been sold products in a criminally fraudulent fashion.
Today, the spotlight falls on banking giant Santander. 'This is Money' has seen the targets staff are expected to achieve. Two whistleblowers have revealed to them how demoralising it is currently working in the branches and how the financially naive are seen as 'easy targets'
The first whistleblower has lifted the lid on the pressurised branch she works in - and claims that customer service comes second to sales targets. Santander pressures its staff to sell products that might not be the right fit for their customers, two whistle-blowing members of staff claim. 'This is Money' has revealed the incentivised targets Santander staff are expected to achieve in order to meet targets, earn bonuses and rewards, and ultimately keep their jobs.
One branch staff member – also known as a personal banking adviser – claims to be one of the bank’s top performers countrywide, working for a branch in the South.
She said: ‘While my performance is great my conscience is suffering. I would love to see a change in banking, the focus is on anything but customer service and I am in a daily battle to help my customers properly.’
She reveals that there is an overall branch leaderboard - and also a personal banking adviser and cashier leaderboard. The latter is based on referrals to advisers, with cashiers encouraged to push customers carrying out simple tasks into seeing one.
She also claims that in most branches, cashiers with no sales training or authorisation give out ‘manual applications’ for credit cards and bank accounts for people to sign without explaining the product properly and the implications on their credit scores.
The whistleblower claims there are 'green ticks' next to customers’ names, which cashiers see when they are paying in a cheque or servicing their account and these green ticks mean the customer is guaranteed to qualify for a product, such as a credit card.
These are ‘often little old ladies with a squeaky clean credit record’ she says and cashiers are known to ask them to sign a manual application form without the customer even knowing what it is for – all to meet targets.
She says that staff training received at the training academy goes out of the window when staff go back in branch and begin selling for real. One of the first things her manager said on her return from the academy, she claims, was: 'You've learnt how you should do it, now learn how to really do it.'
In other words, sell, sell, sell.
Staff gain points for most products they sell. For example, a bank account is currently worth 65 points - but if it’s a switching account from another bank then it can be worth up to 130.
Currently, the whistleblower needs to sell the equivalent of two bank accounts and two credit cards a day at least, plus about £20,000 of loans per week.
She says even though this may not sound like much on paper, it is difficult and competitive in the branch, with new business hard to find. Staff compete against each other on a leaderboard which is published every Tuesday. ‘Competition is ruthless,’ she says.
For every point above the 100 per cent score they are expected to achieve on this, staff are given a cash reward, but this is only paid if the whole branch reaches 100 per cent of its target
'Old, young and financially naive customers are all easy targets'.
Some of the best personal banking advisers have been around years and know how to work the systems inside out, the whistleblower claims.
‘Customers are promised the earth in terms of service but many are dropped like hot potatoes after they've signed on the line. Also Santander have a habit of moving advisers with high key performance indicators around so angry customers cannot easily track them down and hold them personally responsible.’
‘I've seen key facts about products (such as fees or interest rates) left out of all conversations.
‘Advisers are supposed to have an hour with each customer to go through the key facts leaflets, terms of business leaflets, rates and fees literature and terms and conditions but most people are whisked away out of queues, or jumped on from the counter, and quickly asked to sign without actually hearing all of the key bits of information the Financial Services Authority (FSA) tell us to tell customers.
‘The old, the young and financially naive, and also the disabled or mentally challenged customers are all easy targets. Some advisers see these as easy pickings as they can open duplicate bank accounts, cards and even loans to these people to score points when in actual fact these people are being mis-sold and have no idea what they are signing for.’
Top performers have won tickets to sporting events and iPods.
For the new 123 bank account and credit card there is a separate campaign running until the end of the year, the whistleblower says. The 123 account was launched with much fanfare earlier in the year and gives customers the chance to gain cashback on a variety of household bills and petrol costs, while also offering interest on positive balances over £1,000.
She says there are monthly prizes up for grabs for those who have sold the most 123 products, including supercheques (up to £500 per quarter) iPods, gift vouchers and Ray Ban sunglasses. On top of this, top performers are given days out to the British Grand Prix, Wimbledon and Olympics, she claims.
Management turn a blind eye to the complaints against top performers as they make them so much money, she says.
She adds: ‘It is disgusting how we are forced to sell to everyone who walks in the door. You are made to justify why you didn't sell a credit card to old Mrs Holmes whose husband has just died or why you didn't just open a new bank account for Mr Smith instead of upgrading his account like he asked for (worth no points).’
I just want to make customers happy and do a good job!
The whistleblower added: ‘I love my job because I love working with the public and I enjoy working in a bank, but I long to do things the right way and be rewarded for doing so.
‘I have so many happy customers but am constantly picking up the pieces of colleagues who do things the wrong way.
‘I make sure I never sell to anyone without telling them everything, even if it means getting in trouble with management for taking too long.
The second whistleblower says that excellent customer service is 'no longer paramount'
He says that when a customer comes to deposit money, he is under pressure to find at least one product which he can try to sell them, even if they can find a better alternative elsewhere.
The whistleblower says: ‘If I am not seen doing this with every single customer, a member of management will have a stern word with me.’
His branch also has a league table which is updated every week to show how staff are performing.
He says they are given an individual bonus if they hit 90 per cent of their referral targets and 90 per cent of sales targets. If they reach 100 per cent of their targets they will receive an additional bonus, and also a further bonus for every sale over 100 per cent up to a maximum of 200 per cent.
The whistleblower says: ‘I have been threatened with the sack because my sales were not deemed high enough.
‘I’m sure you are well aware that some Santander branches are being shut down and that the staff from these branches need to be relocated.
‘This has allowed managers to make threats such as “Santander will be making cuts and the first to go will be advisers who are performing poorly in their sales.”’
It is sales that we are targeted on. We cannot tell customers that there are better savings rates available on-line, nor can we offer the alternative of opening accounts on-line as this means one less sale in branch.’
The whistleblower also says that advisers do not wish to speak to customers unless they are bringing in new money, for example moving money from Barclays, or the money is from a different Santander branch.
A customer may have £50,000 in a savings account paying 0.1 per cent, he says, but if the money is already registered under this branch's name, no adviser will see them.
It is to be hoped that the FSA's Intelligence Department will have picked up on this excellent piece of reporting and will be even now making decisions on how Santander management can be keel-hauled for encouraging and inciting this kind of criminal behaviour. I have previously discussed Sections 2 and 3 of the Fraud Act 2006 in this column and it is clear to see that the same breaches of the law, this country's primary anti-fraud legislation, are being perpetrated every day against the financially unwary. The FSA cannot and must not be allowed to claim that they were unaware of these practices and must take action to deter this wrong-doing!