Lloyds bans branch salesmen from contacting millions of customers who have asked not to be pestered

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Lloyds has banned its branch salesmen from contacting millions of customers who have asked not to be pestered.

The temporary intervention comes as it investigates allegations by the Daily Mail, which last month exposed how cynical Lloyds staff hoping to squeeze more money out of their customers are flouting laws designed to protect them from being hassled.

The news emerged during a heated hearing with the Treasury Select Committee, in which Conservative MP Mark Garnier described the bank’s conduct since the financial crisis as a ‘pretty sorry story’.

Cynical: Cash-strapped customers who had breached their overdraft limits were approached by salesmen, who would typically try to sell them a loan

A whistleblower at the bank revealed how staff were forced to routinely ‘cold call’ customers even if they have registered for the Telephone Preference Service, which enables individuals to opt out of receiving unsolicited sales calls by registering their home landline and mobile phone.

He said customers who lodged a request with Lloyds not to receive marketing calls – by signing ‘non marketing indicators’ (NMI), often by ticking a box in the small print – were also targeted.

Cash-strapped customers who had breached their overdraft limits were approached by salesmen, who would typically try to sell them a loan.

Under strict rules a bank is only allowed to contact a customer registered to the TPS or NMI if it is to help them, rather than sell a product. But according to the whistleblower, salesmen were told to phone customers on the premise they were making a ‘service call’ and use carefully worded scripts to ensure they did not break the law. Yesterday, Lloyds bosses were grilled by MPs about the whistleblower’s accusations.

Director of customer service Martin Dodd insisted that the bank’ was providing ‘good service’, describing these as ‘courtesy calls’ and the ‘sort of thing banks should be doing’.

But pressed about allegations that staff were pressured by managers to make these nuisance sales calls to customers signed up to the TPS he said: ‘Where there is any kind of pressure that is unacceptable.’

His colleague, director of mortgages Stephen Noakes, said the bank had banned branch staff from making these phone calls.

He said: ‘So now we have stopped those calls. We don’t do those calls.’

Noakes admitted to MPs that the bank did not record phone calls between branch staff and customers and so could not prove whether salesmen had overstepped the mark and flouted the law.

He said: ‘We are not able to review the conversations the individual colleague has had with that customer to ensure that we didn’t move beyond just having the service call.’

Last night Lloyds claimed that Noakes was referring to a temporary ban on sales – or ‘service’ – calls by branch staff to all Lloyds, Halifax and Bank of Scotland customers. It said the ban only applies to those who have registered for non marketing indicators. It said employees in call centres are still allowed to contact customers.

A Lloyds spokesman said: ‘We would not call a customer who is registered on the Telephone Preference Service and if any customers believe that they are registered and have been contacted in error we would recommend that they contact us to ensure their preferences have been recorded correctly.’

The revelations about its pushy sales culture came after Lloyds (up 0.64p to 77.91p) was fined £28m by the City watchdog in December for encouraging mis-selling by offering incentives such as ‘grand in the hand’ bonuses and bottles of champagne to the most prolific salesmen.

Its bill for mis-selling Payment Protection Insurance exceeds £11bn.