Banks a lot for luring clients into red---

[xiona]

todays Daily Record---

[Guest NATTIE]

have you got a web link so we all can read the article, Thanks

[xiona]

Staff bonus for selling big loans

 

BANK staff are being paid bonuses of £100 a week for encouraging customes to take out big loans, a report claims.

 

Documents leaked from two major banks reveal how bosses tell their staff to sel the loans plus the lucrative insurance policies that go with them.

 

Unknown to customers, branch advises are cashing in with high earning rewards if they persuade them to borrow more money.

 

Watchdogs slammed the bank staff bonus schemes as "irresponsible lending."

 

Commission tables for Royal Bank of Scotland and Nat West reveal a scoring system where bank workers notch up extra points for flogging loans with expensive ins. plicies.

 

The report leaked to a financial website by a bank employee shows that in-branch advisers aare able to earn a quarterly bonus of £1200 if they consistently reach a weekly target a about 2700 points over three months.

 

Staff score 30 points if they sell a customer a loan of between £3000 and £4900. But they can pick up 90 bonus points if the loan is sold with payment protection ins. supposed to pay out if a borrower loses their income.

 

If bank workers sell a loan of £20,000 or more, they earn 270 points. But if that loan includes ins. they get 590 points.

 

Teresa Perchard of Citizens Avice said, "we see many cases of irresponsible lending while often the loan insurance is unsuitable or even useless."

 

But Royal Bank spokesperson said"we take great care to ensure that the accounts are sold appropriatley and have a checklist to ensure that our customes fully understand the products and meet our eligibilty criteria."

 

"The incentives reward both sales and service reflecting the priority we place on customer service."

[Guest NATTIE]

Oooops I thought everyone knew that. I should add that customer surveys do also have a part to play so if a branch is riding high on sales and their service score is on the floor, they get absolutely nothing in bonuses. Internal audits take place on a regular basis and staff will and have been sacked for loan irregularities. I cannot really say that any thing else in the article is untrue.

[dave]

their service score makes a difference?

 

They can't be getting any bonuses at all then,surely?

[Guest NATTIE]

Dave you can "work" the customer survey that minimises the score. That's as much as I dare say on a public forum

[ppauls150]

This is probably the main reason why my girlfriend ended up getting a loan for 15k then when they must of known she couldnt afford it and surprised on how they made there decision. She only earns £1,100 a month with a mortgage of £850 a month but when she went down the bank for a review :S he ended up putting her credit card, loan and overdraft into a new loan plus a few k for herself totalling to about 12k and then also stuck on the PPI which we never ever take out even when we have got a loan or credit card as they are a waste of space and charged her about 3k for that aswell. I was fuming when i found out and need to get down the bank to at least canx the PPI. She wasnt expecting anything like that when she went down there but just goes to show what they can do. I wouldnt of even thought that she would of been eligeble for a loan especially that size with her track record and with a ccj and 3 defaults to her name plus not being able to afford £350 a month for the loan ontop of all her other outgoings.

[Guest NATTIE]

I need to clarify a few points. "Irresponsible Lending" does happen and is caused by a number of things. The article points outs that bonuses are the reason which is not really the main reason in my opinion. Targets set by on high and the stress that that entails causes short cuts. When that happens people have got and will get sacked for lending irregularities.

There exists a points stucture for every single account opened from the basic Step account to every manner of account.

There is also internal audits throughout the year with at least one every 3 months. Any paperwork missing or any checks not correctly carried out can lead to sacking. That is for NatWest. I cannot comment on other banks

[Keith22]

Hi,

 

Have a look at the results of this survy for LloydsTSB

 

 

http://www.ltu.co.uk/includes/downloadmedia.php?id=342&mediaref=0&method=view

[Andy999]

I agree banks are sometimes guilty of irresponsible lending, but how about those customers who are quilty of irresponsible borrowing? That does happen too, and since you have to be over 18 (i.e. a grown up) to take out a loan, the customers do, I feel, have to shoulder some of the blame.

 

Personally, I've refused people loans because I didn't think they could repay them and been sworn at. I've had to have the police remove one person from my branch because he told us he wasn't leaving until he got an overdraft increase, and two hours later all the staff wanted to go home.

 

Natweststaffmember's mentioned their audit process - Barclays have a similar

system where loans and other accounts are chosen at random for checking. I can confirm that staff could be sacked for irresponsible lending there too.

[howardbrown]

halifax, like all banks have a bonus scheme, but all lending like the other two mentioned is checked, all loan affordability is worked out from figures supplied by the applicant, so it is part of the reviewer's job to make sure these figures are as accurate as possible

[verdant]

I have been in a similar situation in the past. I applied for a relatively modest loan from Nat West, I can't remember how much exactly, but approximately £4000. At the time I had some adverse items in my credit history and was left in no doubt that I wouldn't get the loan. If however I took a £15,000 and consolodated some other debts then the chap in the branch of NatWest would sort it out so I could get the loan. I assume he had a strong say in the discretionary part of the decision making process.

[Guest NATTIE]

No he doesn't is the answer, if he fails to follow proper lending requirements he will get sacked

[Jaynekul]

I was refused a loan by HSBC because I had had 2 DDs returned in 6 months. They told me you have to have a complete clear history for 6 months before they will consider you. Maybe I will get 1 when I get my charges back!

[Guest HUSBANDKHAN]

Did Anybody Watch That Programme About Where The Banks Lended People So Much That They Started To Commit Suicide ?

[reidnet]

The Daily Record are doing a story withing the next 2 weeks Regarding Payment Protection Insurance and the way it is sold ant the real cost of it..

 

Cant say Much more at present ;)

 

Some sales agents can get up to 67% of the cost of these Policies as commision.. No wonder the mis-sell them ? And thats straight from the horses Mouth ..FSA & OFT Report released on Thursday this week..

[Keith22]

My wife and I survive on two very small pensions and diasbled living allowance. We don't take any money from our small business as we are struggling to repay loans so we can retire. We don't have any overdrafts now.

 

In one week my wife received two offers for a new credit card. Our Halifax account sunddenly had an overdraft limit of £500 and they twice tried to get me to have a credit card when I called into the branch. In the same week I was sent an application form for American Express, an offer of a loan from a finance company, a offer of a £3000 loan from Lloyds ( "we calculate that you can afford a loan of £3000" ) and a leaflet regarding loans from Nat West plus another offer to transfer my existing credit card to another card.

 

Its no wonder people get into trouble and believe me its hard to resist temptation but how on earth can we stop all this garbage arriving - and why us? We just don't have a single penny to spare at the end of each month.

[pampam]

I am about to start my own thread on this but thought someone on here may have some advice for me.

 

I am helping my son & his partner reclaim their bank charges which is all going according to plan "I Hope!"

However I need help with this PPI thing.

 

Brief details are:-

Sons partner took out 3 loans with Lloyds TSB as follows.

 

Loan 1

3/7/01

£2000 advance

PPI £306.70

APR 19.8%

 

Loan 2

13/1/03

£2000 advance

PPI £497.72

APR 17.9%

 

Loan 3

12/4/02 £5000 advance

PPI £1174.84

APR 14.9%

 

She has defaulted on these loans and the case has been to court. Unfortunately she did not attend the hearing and did not tell my son about the debts.

The court ordered her to pay £125 per month in her absence.

I have since negotiated this figure down to £5 per month as she is not working at the moment due to a nervous breakdown. I tried to claim on the PPI for her illness but was unable to do so as she just gave up her job in 2004 but did not sign on as being ill.

 

She currently owes approximately £8500 on this debt.

 

She states that the bank used to phone her on a regular basis and ask her if she wanted to borrrow more money. This was done in spite of her already being well into her overdraft, well past her credit limoit on her C Card and in arrears with mortgage and loan payments.

She says she was not aware that she had signed for PPI, but admits that she was in such a desperate situation that she would have signed anything.

 

I want to try and get at least some of the PPI back for them if I can.

 

Can anyone help compose a letter and should I send it to Lloyds or to their solicitors. Or should I just take the case back to court and let the judge decide.

 

Any help and advice greatly appreciated.

Thanks

Pam

[Keith22]

Hi

 

It is always helpful if you start your own thread so people can track your progress and help out where they can.

 

I assume that PPI was sold to you in the normal Lloyds way i.e. the premiums were added onto the loan as a lump sum.

 

Do you have a copy of the original loan agreement and the PPI agreement? If you have look carefully for any tick boxes. i.e. previous medical condidtions etc. Did the bank fill in the forms or your son's partner? Lloyds have an adversion to paying back PPI as I am discovering. They will quote the terms and conditions to you and tell you that you can't cancel. Don't give up.

 

The best approach is to try and find evidence of misselling in my opinion. Were there any pre-existing medical conditions? Can she remember anything at all about the selling or is it too long ago? If you can find any evidence of misselling then you could try writing to Lloyds initially. A few people have had success but most will meet a blank wall. Once you have their final reply then you could try the Ombudsman. It won't cost you and is worth a try. If you want you can PM me and I'll try and help.

 

My claims for refunds are currently with the Ombudsman - after a great deal of reseach and thought I decided to go this way with the option of court action at a later date if the FSO finds against me.