Banking News: Mystery Shopping Uncovers Bad Advice, Fines Incurred


Mystery shopping is an often used tool for companies to monitor the customer experience and ensure that employees meet key operational standards. Sometimes, though, it can uncover more than that.

In the last 15 years, Ann Michaels & Associates has found that clients often times learn more about operations from their mystery shopping reports. Shoppers have reported a variety of additional information through keen observational and reporting skills, including:

  • Incorrect product information
  • Misinformation provided to customers, showing a trend by geography, which indicated that training procedures were not properly followed in a particular region of the company
  • Employees, who are disgruntled or simply being overly honest, suggesting to customers that they visit the competitor because the prices are better

Most recently, an article out of the UK illustrated how a mystery shopping program uncovered the fact that bad advice was being offered to customers, likely as a result of the staff not following proper procedure in learning more about the customers and their financial situation prior to offering advice and suggestions.

Santander UK was recently fined 12.5 million after regulators employed a mystery shopping program which revealed significant failings in providing financial advice to customers. The exercise showed that Santander UK was deficient in the following areas:

* failed to make sure that its advisers were fully getting to grips with customers’ personal circumstances before making a recommendation, including understanding how much risk they were willing to take;

* failed to ensure that customers investing were given clear and not misleading information about its products and services;

* for Premium Investments, failed to carry out regular ongoing checks to ensure the investment was still meeting customer needs;

* failed to make sure new advisers were properly trained before being allowed to give investment advice; and

* failed to properly monitor the quality of investment advice which meant that, where poor advice was given, it was not always picked up.

Financial advice is a tricky subject, and consumers need a lot of help and guidance in this area. Unfortunately, for those who do not know much in this area tend to rely heavily on advisors, and trust that they are providing the customer with accurate information and make suggestions that are best for them. In this case, it uncovered the fact that this was not happening, and much of it revolves around training and monitoring of the staff.

When consumer trust is broken, especially on a large scale such as this example, it’s hard to recover as a company. When this concern was first brought to light, Santander UK made the decision to halt advice offerings at its branches, and ultimately closed down the division. It’s a sad ending for this story, but its one that highlights the importance of continually monitoring staff performance, knowledge, and insight, especially in the area of financial investments. It’s better to implement an ongoing measurement program in a proactive manner to pinpoint challenges early on rather than finding out the hard way.



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