The real economic consequences of the Covid-19 pandemic on individuals will only become apparent once the Government’s furlough schemes and support for the self-employed come to an end. More than 12 million workers are being supported by those schemes. Economists are predicting that unemployment could reach levels not seen since the mid-1980s.
In anticipation of the impending surge in unemployment, Lloyds is proposing to set up a Financial Assistance Team, across all three brands, with aim of helping individual households deal with the consequences of financial hardship. It’s a good idea.
The bank expects there to be lower levels of banking activity in branches for the foreseeable future and is proposing to second 900 Banking Consultants and 100 Bank Managers to this new team for up to 18 months. Those Banking Consultants and Bank Managers will work from home offering financial assistance to customers. For those staff wanting to develop new skills which will offer future opportunities to move on in the bank, the new roles are certainly worth considering. The bank will be expecting seconded staff to work flexible hours throughout the week.
So far, so good. The bank is not offering this new service out of altruism but because it knows that a savage recession will lead to huge loan losses as individuals and small businesses suffer. In her message to staff, Jo Harris, Managing Director of Lloyds Community Bank, kept referring to the achievement of performance metrics for this new team and that raises a number of important questions, most importantly: how is individual performance going to be measured? We have been here before with Lloyds. What starts off with the best of intentions quickly turns into a performance free for all, with staff pressurised to hit targets. In June, Lloyds was fined £64 million for failing to treat over a quarter of a million mortgage customers in arrears fairly. The FCA said: “’Banks are required to treat customers fairly, even when those customers are in financial difficulties or are having trouble meeting their obligations. By not sufficiently understanding their customers’ circumstances the banks risked treating unfairly more than a quarter of a million customers in mortgage arrears, over several years. In some cases, customers were treated unfairly, including vulnerable customers. Customers should still pay what is owed, but banks are obliged to treat their customers fairly when making new payment arrangements”.
We hope the bank has learned the lessons of the past. We will review the bank’s performance criteria for these new roles once they available and any attempt to pressurise staff to pressurise vulnerable customers will result in an immediate referral to the FCA.
In the meantime, members with any comments or issues they would like us to deal with should contact the Union’s Advice Team on 01234 262868 (choose Option 1).