Secret bank manual tells how to avoid giving charges back (unless the customer is dying)

High Street giant Lloyds TSB, which has been accused of overcharging customers £300 million a year, has issued staff with guidelines on how to deal with complaints.

In a 16-page training pack it instructs workers to: • Reject first-time claims, even if they are legitimate.

• Offer a maximum payout of £750.

• Only offer immediate settlements to those who are "very ill" – or dying.

• Not refund or waive interest.

Banks and building societies make an estimated £1.7 billion a year from levying charges of up to £39 each time a customer goes overdrawn or bounces a cheque.

Since Financial Mail on Sunday and consumer groups began highlighting these "unfair" profits and campaigning for a fairer system, millions of customers have asked their banks for a refund of the charges.

Lloyds TSB has been so inundated with claims for refunds that it has set up a special Recovery Centre at its offices in Andover, Hampshire – and has had to draft in agency workers to help its hundreds of "customer care" staff.

The training booklet is the first concrete written evidence of the banks' seeming determination to cheat their clients out of reclaiming the fees.

One complaint handler for the bank, who contacted The Mail on Sunday, said: "Cynical does not even begin to describe it.

"I was placed by a recruitment agency, working from 5pm until 1am for about £200 a day to work in this nondescript building on the outskirts of Andover.

"I was one of about 50 people just dealing with complaints about service charges – we were told the bank was receiving more than 500 a day.

"This training pack was given to me on my first morning and I was told I had to adhere to it as this was the company policy – no deviating.

"The booklet was telling us to reject customers asking for refunds, then to palm the more persistent ones off with nuisance money."

He added: "It did not matter if the charges had been unfair or if the records showed the applicant was owed thousands of pounds in refunds.

"We were told to offer those who wrote in after the initial rejection refunds of up to £750 – but for most the claim was going back five to ten years, meaning the money people were owed ran into the thousands.

"The bank's attitude was very much that they could take it or leave it and we were always told that it was to be stated that this was a goodwill offer, and in no way an acceptance that the customer had a case."

The Banking Ombudsman investigates complaints from customers about their bank, but it is a lengthy and time- consuming process.

Banks, for example, are given up to eight weeks to respond to the original complaint.

"Offering people £750 to just go away was a quick and easy option,' said the Lloyds TSB worker.

"We would tell them it would be in their bank in two days. What none of them knew was that they could still pursue the bank for the rest of the money."

This year, bank customers have reclaimed more than £200 million in overdraft fees.

Campaigners argue the real cost to a bank for a bounced cheque is only £2.50.

Andrew Oxlade, Editor of The Mail on Sunday's financial website This Is Money, which has led the campaign to highlight unfair bank charges, said: "One has always strongly suspected that bank staff have not come up with these sort of dirty tricks on their own, particularly when they sometimes sound like they are reading from a set script.

"Now we have the first concrete evidence that at least one of the big banks is actually schooling workers in underhand tactics. It is quite simply appalling."

The Lloyds TSB training manual carries the distinctive prancing horse logo and describes as Complex Cases anyone writing in for a refund for the first time.

It says: "We tend to reject these unless there is evidence that a customer is vulnerable."

In another section, under the Paying Out Rules, it tells staff of a £750 Payment Rule and says any pending charges for a customer accepting the offer are to be waived.

The document says customers have to be "very ill" to be considered vulnerable in order to get an immediate refund.

It also states: "Death cases: if you identify the customer has died since complaining, or a party is claiming on behalf of the deceased, DO NOT DEAL.

"Clearly indicate that it is a death case and pass it to your team leader."

And on the media, the document says: "Any cases with mention of Press involvement or threats of media need to be passed to your team leader immediately. Do not review these cases!"

A spokeswoman for Lloyds TSB said: "Clearly, as a large organisation we have a policy for handling complaints but this is purely a framework, and every case is handled on a case by case basis according to the individual circumstances."