LLOYDS is facing an FSA probe into the state of compliance practices which may have enabled mis-selling to take place back in 2011, it emerged yesterday.
The revelation came hours after top regulator Martin Wheatley told the industry it has just 18 months to reorganise bonus rules to remove perverse incentives which can promote damaging sales practices.
Banks are rushing to meet the tough new regulatory guidelines, yesterday pledging to crack down on mis-selling.
If they fail to hit Wheatley’s targets, he will take a “more intrusive” approach, which could see individuals punished.
Wheatley’s bold effort to change the whole selling culture within banks represents a major challenge for the embattled industry.
Consultants expect banks will have to change the way they recruit and train staff, and spend more on HR and compliance to clamp down on mis-selling if they want to please the regulator, who will soon head up the Financial Conduct Authority.