Friday, 16 January 2015

Mis-sold, Mislead or Mismanaged Some causes of #Mis-sellingEFG

mis-selling *
"The Budget freedoms that come into force in April could trigger mis-selling claims worth billions of pounds"

"Does rising proc  (procuration) fee chasm create mortgage misselling risk?"

"Time to bring an end to mis-selling"

"City directors jailed for biofuel mis-selling  "

Above are just a collection of headlines in the media about mis-selling. The financial institutions have to sort out and fix the problem much like handling and resolving a complaint anyone in selling is familiar with.

But what if it is in the case of a state owned or part taxpayer funded enterprise?

The current mis-selling story doing the rounds is about RBS ( 80% owned by the UK tax payer) in their mis-selling of Enterprise Finance Guarantee  EFG .

The Scotsman  today reported Colin Borland, the Federation of Small Businesses’ head of external affairs in Scotland, said: “It is disappointing to see another mis-selling episode involving small businesses and the banks. RBS needs to move quickly to take care of these small business customers.”

The EFG scheme provides 75% government (tax payer funded)  guarantee to lenders ( e.g) RBS willing to  support  viable small businesses that lack security to obtain a bank loan.

RBS has admitted that some of its customers were incorrectly told that the tax payer guarantee was for their benefit (e.g. small businesses’ benefit) rather than for the bank.

In certain cases only when the EFG  customer defaulted did the business owner discover that they remained liable for the entire outstanding loan.

 Perhaps we have a right to ask Business Secretary Vince Cable and his team regarding the EFG scandal to investigate on our behalf areas such as
1.       What  are ( were) the board of the lender's  responsibility and commitment  to Selling EFG , their responsibility for setting of targets, their responsibility for  design of incentives, bonuses and commission (as well as the salespeople responsible ( Relationship managers) who carried out the directions of the board)
2.       Selling ethics –  Did Self regulation in this case work?,  Was Best practice, best advice given? What is the role of regulators and government on critical points of a selling offer?
3.       What was  the quality of training,  how was it measured and  how was it monitored?
The Times of London implied a connection with the departure of The deputy Chief executive who left on Dec 31st
An “Accountability Review” is being lead by head of commercial banking and private banking for RBS Alison Rose. She is quoted as saying in James Hurley’s Times article 15th January
“Our Relationship Managers ( RBS Salespeople) were not clear enough on explaining the liability issue which is critical to customershead of commercial banking and private banking for RBS, Alison Rose
In view of the importance the head of commercial banking and private banking for the lender places on this issue which is critical to customers  we might well seek some clarification on these questions:-
1.      Was this liability issue, which is critical to customers, included in the sales/product training ? Did the senior management identify this liability point in their Training Needs Analysis ?
2.      Was the liability issue, which is critical to customers, stressed in the course content design and commissioning ?
3.      If it was – how was liability issue ,which is critical to customers , actually trained ?  Did the training manuals stress ,with examples, how important this   liability issue which is critical to customers?
4.      Who signed off the training manual content ?
5.      What skills practice was undertaken on the liability issue which is critical to customers  Was it merely lecture input, or  demonstrated with specific examples, or  actively role played by the delegate Relationship Managers ?
6.      What post training course field coaching and monitoring was undertaken to ensure this liability issue, which is critical to customers, was communicated clearly to client prospects?
 * There are fortunately over 500 posts published on this site about Good Selling  and positive stories about Selling.

1 comment:

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