Bank staff may be forced to sell debt to customers who can’t pay – union

"The consumer should be better off as a result of being sold the product being offered," says banking expert Claire Matthews.

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“The consumer should be better off as a result of being sold the product being offered,” says banking expert Claire Matthews.

New Zealanders are being put at risk by bank staff who are being forced to flog loans and credit cards to meet their sales targets, the union representing them says.

First Union is launching its Service before Sales campaign in Wellington on Monday, calling for the country’s big banks to implement a plan to end debt sales targets as soon as possible.

The campaign launch comes two months after the release of Australia’s Sedgwick Report, which recommended 21 changes to transform banking culture from “sales first” to “service first”.

The major Australian banks, which own the big four in this country, agreed to adopt the report’s recommendations.

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Bank staff are suffering humiliation when they cannot meet targets, their union says.

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Bank staff are suffering humiliation when they cannot meet targets, their union says.

First Union said two New Zealand banks, ANZ and Westpac, had made commitments to do the same.

ANZ revealed on Friday it was changing its remuneration structure.

From October, 25 per cent to 30 per cent of frontline workers’ bonuses will be determined by how much they sell. At the moment it is more than 50 per cent.

Union organiser Tali Williams said it was something the union had been talking to banks about for years.

She said staff had reported feeling stressed by sales targets. “It’s so unrelenting, they feel pressure to sell products beyond what a customer needs.”

Williams said that was a concern for customers as well as staff. “They might take on debt they can’t afford to pay back.”

First Union surveyed employees at 40 ANZ branches and found 77 per cent felt pressured to sell beyond customers’ needs, about 10 percentage points higher than competitors.

The New Zealand Bankers’ Association has been contacted for comment. It previously pointed to changes in the Financial Advisers Act. The new regime will require banks not to remunerate staff in a way that does not put customers first.

But Williams said that was just more pressure. Staff now had to “tick boxes” before they recommended products to customers, but still had to shift the same number overall.

Life insurance was a key focus for banks at the moment, she said.

Williams said it was time New Zealand banks followed the rest of the world in lessening their focus on sales targets.

She said it was likely that there would always be some form of target, but banks should be forced to consider whether it was right that debt products were part of the target, when they could have a negative impact on the community.

But banking expert Claire Matthews, from Massey University, said the campaign showed a lack of understanding about the relationship between customers and banks.

“I think in some cases there will be substantial pressure on staff to sell products, but we need to remember that banks are profit-making entities and sales are what generate the profit.  Would customers prefer to pay for the services that banks provide?  I suggest that the answer to that question will almost invariably be no,” she said.

“It is possible that the pressure to sell could negatively affect consumers, but sales targets should be based on a requirement that the sales are appropriate for the consumer which includes being needs-based. 

“I don’t have a problem with consumers being asked if they have life insurance or KiwiSaver, because the consumer may not think about it until asked or may not understand the product. 

“And some consumers may keep putting off doing anything about it although they have identified a need for the product, and the question spurs them into taking action. 

“In general, the consumer should be better off as a result of being sold the product being offered. “


 – Stuff

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