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Lloyds fined record £28m over bonuses

Firm pushed front-line staff to flog dodgy deals to customers

Lloyds Bank bosses were slapped with a record £28 million fine by regulators yesterday for forcing front-line staff to flog products to customers or face pay cuts and demotion.

The Financial Conduct Authority (FCA) said it had imposed its highest ever fine over a bank's high street operations for "serious failings" in bonus schemes linked to a tidal wave of mis-selling.

Bosses bullied workers to sign up customers by threatening them with pay cuts of up to 50 per cent.

An FCA probe found that 14 per cent of Lloyds TSB staff had been demoted for missing targets.

Others were promoted or handed windfalls of up to 35 per cent of their monthly salaries.

The FCA found that hundreds had seen payouts even when all their sales were "unsuitable or potentially unsuitable."

The scandal focuses on sales of stocks and shares, tax-free individual savings accounts and insurance products between January 2010 and March 2012.

Lloyds now faces an unknown compensation bill.

Bosses at the 32.7 per cent taxpayer-owned group, which includes Halifax and Bank of Scotland, claim that they have since changed the way bonuses are awarded.

But finance workers warned that companies were still hounding branch staff to sell at any cost by offering poverty wages and forcing them to hit targets to get a bonus top-up.

Banking union Unite raised the alarm on Lloyds' pay model in 2009.

It said that many workers were earning as little as £13,000 a year in basic salaries and had to rely on performance-linked payouts to get by.

Unite national officer Dominic Hook said yesterday's fine was more evidence that the finance sector had not changed despite its 2008 collapse that has cost taxpayers billions.

"Despite the countless reports and investigations into the conduct of the banks the industry clearly has not learned the lessons of the financial crisis nor heard the concerns of customers and staff," he said.

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