Pressure on bank staff to push “unsuitable” financial products on customers is hurting the integrity of the industry, the Finance Brokers Association of Australia
(FBAA) has warned.
The FBAA is responding to a Fairfax Media report, which claimed Commonwealth Bank staff felt pressured to meet performance targets to sell products which are not in the customers’ interests.
The FBAA’s Peter White said this is another example of the way banks and major lenders “stop at nothing” to ensure they improve their financial bottom line.
“This might be great for shareholders but comes at the expense of customers who are being offered loans that are unsuitable and unsustainable.”
White has now highlighted that this is a “fundamental difference” between bank-originated and broker-originated loans.
“It is all about transparency as banks are under no obligation to disclose commissions, unlike finance brokers,” he said.
“The Financial Services Union has got it right in condemning this ‘sales culture’ within the banks. In fact it is this type of practice that provides ammunition to those pressing for a royal commission into the banking industry.”
Unlike banks, which have volume and sales targets, White said brokers are more inclined to act in the best interests of consumers.
“Brokers rely on repeat business and know the value of keeping the customer happy and more importantly sustaining an honest and open financial relationship,” he said.