Banks Cross-Selling Unsuitable Products Not in the Interest of the Client

[Deactivated] on 18/06/2015 - 21:56
Last edited 18/06/2015 - 22:07

What does everyone think about this?

Should Banks accept that they have a Fiduciary Duty to their Clients first and Shareholders second?

I'm going to keep this succinct as possible. Basically my parents don't really understand English and set out in order to create new transaction accounts. Somehow along the way they were most likely persuaded to take on various savings products which provided a naturally lower interest rate than the product that they were currently in. I have no idea why the products were even offered. However, this is not really that important when the next point is revealed. I found it delusional that several different savings products were opened.

When I confronted the Manager, he kept repeating "Higher Interest" and that was the reason why the new accounts were opened. Clearly not… If there was higher interest, there should have been some sort of discussion about which one of these savings products were the most suitable, rather than just opening several at a time without really looking at the circumstances and what would be most beneficial to the Client.

I have a natural Familial and Fiduciary to assist in the management of financial affairs of my non-English speaking family. I'm not sure of my standing here but I think simple common sense would have dictated my true position. In the future I might have to consider other forms such as Power of Attorney to convince the Manager that I really am looking out for the best interests for those around me.

How can anything be legally binding if the person that they are selling the products to isn't even aware of why they have the products in the first place? I suspect a flaw in procedure was at play as if someone tags along in a conversation, they naturally assume that they follow the whole conversation. So when it comes time to sign, even though you don't understand anything, at that moment the accounts just get created.

The Manager tried all sorts of tricks to get me to cave in by hinting that I was shouting, but that was the normal conversational volume that I use in everyday life. That I was not the account holder, and that I was talking weirdly (naturally faster - I can't imagine how the Manager would handle rapid speech with other Asian counterparts). The Manager used another dialect which meant that we couldn't really convey the complex issues even after insisting that we spoke Cantonese. Using Broken-English is bad enough, using a Broken-Dialect is dubiously annoying. When I tell the Manager that I am more knowledgeable about the situation because I have already been briefed about it and they haven't, it is met with disbelief but common sense did prevail. Furthermore, conveying disappointment and annoyance by sighing and so on at the predicament is natural behaviour and natural body language which should have been obvious, but was met with threats of imposing security guards. Naturally, I'm cool about this because I've experienced similar bullying throughout my life about my style so it is only mildly infuriating.

So what does everyone think I should do? Discrimination is still well and alive in this Country it seems, especially when you are taken advantage of because you don't understand English… Of course the opposing party will have to defend themselves even though they are wrong. Who wouldn't?

I really wish I did have a recording of what happened. I think it would have been a good laugh maybe on Youtube.

All in all, solved, but had to waste a few hours in line and inside the office… Not pleased. Has anyone been through anything similar? What is being done about it?

Erm. TL:DR, Basically parents went in to create new transaction accounts, but came out with other various savings accounts along with the appropriate transaction account. Both weren't exactly sure what happened, but they queried me about why there were so many new accounts. I had to rush out and figure out why this happened with the Manager and after a long dispute… Still no reply about why, but managed to close the inappropriate accounts. The person who was actually assisted in opening the accounts just hid away and didn't respond… I don't think they should have forgotten after less than an hour, so I suspected a coverup.

Financial

Comments

  • nocure on 18/06/2015 - 22:07

    TL,DR please

  • [Deactivated] on 18/06/2015 - 22:25

    There must be a reason why they are so aggressive at offering these accounts. I know personally I have been offered the options many times but rejected them. I'm kind of annoyed as it creates a lot more useless paperwork with no benefit to the consumer. Oh and believe me, they know which other products you have, especially if you show it to them…

    I'd be more annoyed if my parents came back with some sort of Loan or something… Freaking glad that didn't happen! I think similar things happened at other banks, pushing people into investment products that were unwarranted and caused an economic loss. However, pushing someone to a low yielding savings account is technically causing an economic loss, it is all about opportunity cost.

    You might think that there is no harm, but if someone really believes the Banker and trusts them. Then they'll just move cash into a low yielding savings account and at a future date even into very high risk products that are marketed as safe. It always happens because time to time we see things on television. aka CommBank's Financial Planning Scandal and more.

  • bluebat on 18/06/2015 - 23:10

    would u like fires with that? is the only thing i can think about when cross selling is mentioned.

    but in regards to all the extra a/c's that were opened. i would guess the person or branch had sales targets to meet for the month or year & had to beef up their numbers before they got a bad performance review. so saw your parents come along & could briefly mention other products to them & open them along with the requested transaction a/c as your parents did not understand enough to say no i don't want those a/c.

    Wished the banks cared about Fiduciary Duty, but that's never gonna happen. It's all about maximizing fees & penalties so people can get their bonuses.

    • scrimshaw on 18/06/2015 - 23:31

      Banks are like retail stores. They push pretty hard for sales.

  • Cheeper on 18/06/2015 - 23:28

    Usual story… do your own research before jumping. When you jump blind the outcome is usually not a good one.
    Speaking of investment choices, major purchases, etc.. It is all up to you.
    Salesmen earn a living from selling their product, do you honestly expect them to recommend other products?
    (bank managers or staff are salesmen btw)

  • ozhunter on 19/06/2015 - 01:27

    Tell your parents not to agree or sign anything if they don't understand it. What did they actually sign up to? Something like a savings account linked to an isaver account?

  • [Deactivated] on 20/06/2015 - 15:37

    For ozhunter:
    Yeah, something similar to the iSavers and others. At the moment, not really into singling out the Bank and Branch. So I won't reveal the financial products which will undoubtably draw attention to their social media team.

    I had to explain the products and how they worked, and even checked the interest rates because it clearly wasn't ingrained into my parent's minds.

    I can understand why something like an account linked to the Transaction account might have come as standard (which it actually doesn't because I know, but let's assume that it did or was on the same form). Why would they open several different other savings accounts? I gave them the benefit of the doubt by just stating that it was unethical behaviour and asking them why, but now I'm suspecting that it was closer to the lines of something more sinister.

    To be honest there are really several issues at play:

    1. Was the product suitable given the particular scenario? If not, why?
    2. Have proper procedures been followed in the opening of the accounts? If not, why? (Language Barriers and Improper Disclosure)

    Neither of these were actually answered.

    For xywolap:
    The thing I didn't mention was that it was the same Bank… They didn't jump ship… That's why I thought I didn't need to be there because I was busy managing my own affairs. Luckily I was only down the street.
    I took out a lot of details and if I put them in here, you'll see why the Manager was very unreasonable… The more I tell you guys about it, the more insane it's going to look.
    When he threatened me I was seriously going to call the Police and see if I could get him charged with something, but I was reasonable and knew that this would only inflame the situation, so naturally I threw this option in the bin. I can tell you guys for sure that this happened because I kept mentioning that something unethical or possibly illegal had happened and he kept denying it, and I kept asking why, why, why? Because I wasn't getting the right responses other than it was a higher interest product. I didn't even have to use foul language or anything like that because I pretty much owned the argument. So when you kick out the only person who can really help to explain why we have the complaint, it just seems like it's bordering lunacy.

    I should have had the insight to see into the future and know that this policy existed at this particular Branch which I frequent oftenly. Even though they already denied that any such policy exists. If what you guys have said is right, then the Manager was most likely pushing the Employees to meet targets which were unreasonable. This is seriously dodgy and eventually lead to "illegal conduct" and it's only a matter of time. They are salespeople afterall, to quote what has been said.

    I don't even have to ask them why anymore because the comments above are enough… It's strange why some people in certain professions can no longer tell the truth anymore…

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