Banks 'pressuring customers' with scare tactics

The survey found 25 per cent of bank staff feel uncomfortable about selling debt-causing products to customers. Photo / NZ Herald

Sales staff at banks are using scare tactics to pressure low income families into buying products they can't afford, a whistleblower said last night.

It came as a survey showed 25 per cent of staff feel uncomfortable about encouraging customers to take on overdrafts and credit cards.

The bank worker - who spoke on condition of anonymity - said staff discussed sales strategies for individual customers after retrieving their income details from bank records.

When selling life insurance, they commonly raised fears about "what would happen to your children's future" to force a sale.

The employee, who works at a major high street bank, said the constant pushing of products on to customers was similar to the McDonald's philosophy of asking: "Do you want fries with that?"

He said each worker was expected to make at least 25 sales a week - and targets didn't drop even if a customer is in financial strife.

"The philosophy is around selling something to everybody. It's a fine line. You feel like you are throwing them a lifeline when in actual fact it's an anchor."

The source said some banks even use staff names and account details for training.

"Everyone goes around and says what they would sell to this person."

The bank he works for set up a stand on a university campus to tout for business using young, blond, female bank staff.

"I felt it looked a little bit weird because they were all a certain type. It almost looked like a cheerleading squad."

The survey, by the bank workers' union Finsec, of 585 bank staff revealed that 25 per cent feel uncomfortable about selling debt-causing products to customers.

A further 45 per cent said they felt debt selling to customers had become a higher priority.

Almost four out of five workers said they wanted banks to reduce sales targets during times of recession.

Finsec deputy president Maxine Mullen said staff were "terrified" about failing to meet sales targets.

She said: "If they are not meeting these targets they're feeling bullied into doing things. They feel they must ask the customer the question if they can see that the customer hasn't got a credit card or life cover."

Mullen said staff are made to write a list of their sales targets at a meeting every morning.

"Basically it's a pledge as to what they think they can do for a week."

Banks spoken to last night denied the claims.

Westpac head of corporate affairs Sue Foley said Finsec's surveys had revealed her bank's staff were the least pushy.

"Like any organisation in retail we do have targets, but our staff don't have set targets for certain products. We're there for the customers," she said.

Kiwibank communications manager Bruce Thompson said the source's criticism didn't apply to his bank:

"The targets and incentives that operate in the Australian banks are quite different to the way Kiwibank operates. We don't have individual performance targets."

Director of Massey University's centre for banking studies David Tripe said bank's retail operations were legally constrained by the Banking Ombudsman and the Fair Trading Act, and the evidence suggested the source's criticism was not widespread:

"We don't see large numbers of judgments or prosecutions brought against the banks."

Avoid getting in debt

* Work out your finances before you go to the bank so you know what you can and can't afford.

* Learn to say no. You don't have to agree with the bank that you need what they're pushing.

* Seek independent advice on-line or through a budget adviser.

* Think ahead. Plans like having a baby will change your financial position.

- Source: NZ Federation of Family

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