• Stuart Fowler

Debt recovery: another case of banks’ incentive structures causing breaches of banking practice?

The Sunday Times story, Lloyds bank staff ‘puts frighteners’ on debtors, sourced from undercover reporting, looks like further evidence of banks creating perverse incentives that have the entirely predictable effect of causing staff to treat customers badly, breaching either banking practice (as here) or (in savings and investment products) FSA regulations.

To laymen, these breaches are much more serious, against common decency. Do these bank boards have no idea what their managers are doing that has such systematically predictable outcomes? Or do they know but just don’t care?



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