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Pity the regulators. Just when they think that everything which is to be disclosed has been disclosed, along comes another example of poor practice to bedevil the image of the financial services sector. Admittedly the Wonga saga which came to light this week has been under investigation for some time but when you add in the fraud lawsuit which has been filed against Barclays in the Unites States, any faint hopes of rebuilding trust are once again dashed.
The Barclay’s lawsuit relates to alleged falsification of documents and misrepresentations in respect of “dark pool” trading. Wonga has been found guilty of, in the FCA’s words, “unfair and misleading debt collection practices” including the sending out of letters from non-existent legal firms.
When organisational culture ceases to focus on customer outcomes and instead calls for short term gains the result may be ‘profits now’ but the long term cost is one of loss of confidence and reputation. In seeking to redress the balance the regulators are looking not only for a change in behaviour but also a cultural overhaul which sees customer service and doing what is right put at the heart of every organisation. However far along the road businesses have travelled, as long as the toxic behaviours of the past are continually being dragged to the fore customers will be forgiven for treating ‘turned the corner’ claims with a degree of scepticism.