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The media has been all abuzz lately about the Big-5 Banks and the shady practices they are using to dupe unsuspecting customers. I was approached twice by CBC for an interview which I declined both times. The reason? First of all, the mere thought of appearing on live national TV gives me a full-blown panic attack. And, secondly, I don’t really agree with the media’s strong irascible outrage the GoPublic admissions have provoked.
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This is my opinion based on being a former bank employee and a current customer.
A little bit of history
When I first started working in the banking industry, the business was only transactional. Customers came into the bank to cash their cheques, withdraw cash, pay some bills. Maybe they wanted to buy a GIC or take out a loan. There was limited choice available at the time. Customers went into the bank for a reason and came back out with what they wanted – not unlike going to Wal-Mart for a pack of socks or Safeway for a loaf of bread.
In time, more and more products and services were offered. Bank staff who previously were customer service oriented now had to learn how to inform their customers about these new products and, yes, sell them. Thus, the sales culture was born.
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This didn’t initially bother me. Employees took courses on sales techniques, negotiating skills, addressing features and benefits of products, and the occasional motivational seminars at least took us out of the office for the afternoon.
I was good at sales: always in the top three of our sales board. But, I did it the old-fashioned way. I knew the bank’s products inside and out and knew how to match them to my clients. I had an excellent network of realtors, brokers and the smaller car dealerships in my area. I could always meet my sales goals.
Then came the bank’s “flavour of the month” products that were not necessarily appropriate to all customers but we were expected to aggressively promote them. I am not an aggressive sales person: I like more of a “these are the features and this is how it will benefit you” strategy. This was not the only reason I resigned, but it certainly was an important one.
The pressure of sales goals
I am sure that the banks are not encouraging unethical and illegal practices from their employees, although I wouldn’t be surprised if they were turning a blind eye.
In my opinion, the staff that lie to customers, or increase credit limits and add products without the customers’ approval or even knowledge to make their sales goals should be fired immediately.
Those who are stressed or taking extended sick leaves are not in the right job.
Am I being hard on them? Maybe. But aggressive sales practises are the norm in many other businesses. You need to have the right personality to do well in that type of culture. It wasn’t for me and I knew it.
How can customers protect themselves?
When I had a new customer, I input all their information and a screen would pop up stating what amount of credit was approved for them.
The conversation would go like this:
Me: Mr. Adams, you are automatically approved for an additional $20,000 of credit. You can take it as a line of credit, or split the amount and use part for a new credit card. A line of credit won’t cost you anything until you use it. It could come in handy with this new home purchase to cover any unexpected expenses you may have, or if you perhaps need to buy new drapes or upgrade your appliances.
Mr. Adams: Sure, that would be great!
I can’t think of one person who declined my kind offer.
So, what does this mean? If you are offered a product that you don’t want or need, channel Nancy Reagan and just say “No.” If you have some interest but are not quite sure, ask for more information so you can make an informed decision. Don’t blindly accept products being pitched to you.
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If your loved one is elderly or a new immigrant unfamiliar with Canadian banking, and you are concerned about them being forced to agree to a product by an employee using fast-talking sales practises, encourage them to bring information home so a trusted person can look it over.
Make it a practise to look over your statement monthly. While many charges will be waived, technically you only have 30 days to make a complaint.
If the bank employee refuses to negotiate mortgage or GIC rates (there is a decrease in sales “points” for every ¼% reduction or increase), threaten to take your business elsewhere.
Final thoughts
Bank bashing is a common Canadian activity, especially when we see the humongous profits they regularly rake in (which are not passed on to front-line staff, by the way).
The odds are that many of you are shareholders and have a vested interest in the Banks doing well.
In the 2008-2009 financial crisis, when US banks almost imploded, Canadian banks were touted as being the most secure in the world.
However, with the recent media exposés about employee conduct, banks will have to work double-time to regain their customers’ trust.
Marie Engen is the “Boomer” half of Boomer & Echo. In addition to being co-author of the website, Marie is a fee-only financial planner based in Kelowna, B.C. This article originally ran at the Boomer & Echo site on March 16th and is republished here with permission.
