After wells fargo fake account scandal, feds caution banks about employee incentive programs – the morning call

I understand why the question was posed. Bank fixed deposit interest rates in india 2013 Banks are in business to make money and refinancing mortgages is one way they do it. Bank interest rates calculator india Our conversation was brief, congenial and harmless. Indian bank fd interest rates for senior citizens But a federal agency that oversees banks is concerned that some sales pitches may be pushy or even deceptive as employees try to meet sales goals to qualify for bonuses or keep their jobs.


On Monday, the Consumer Financial Protection Bureau issued a bulletin to banks and other financial businesses. Best interest rates on bank deposits It warned them to be reasonable with incentive programs where employees are rewarded for selling or referring new products or services to existing customers, signing up new customers, selling products and services at higher prices or meeting target amounts for debt collections.

In the wake of a nationwide scandal over its sales practices, Wells Fargo has acknowledged opening nearly 80,000 unauthorized accounts in Pennsylvania that hit more than 2,000 customers with unnecessary fees.

It said that as a result of incentives for hitting specific targets, a bank’s telemarketing service provider deceptively marketed overdraft services and enrolled customers in those services without consent.

It said the bureau resolved 12 cases involving improper marketing of credit card add-on products or retention of customers once they were enrolled. Current bank interest rates uk The bulletin said “incentives frequently enhanced the risk that banks would engage in such improper practices.”

The bulletin noted that reasonable incentives can result in customers receiving better service and financial institutions attracting and retaining high-performing employees. Bank deposit interest rates ireland But the bureau warned of the dangers, too.

“Despite their potential benefits, incentive programs can pose risks to consumers, especially when they create an unrealistic culture of high-pressure targets,” the bulletin said. Axis bank fd interest rates for senior citizens “When such programs are not carefully and properly implemented and monitored, they may create incentives for employees or service providers to pursue overly aggressive marketing, sales, servicing or collections tactics.”

It cited the potential for employees to open unauthorized accounts, misrepresent the value of a product or service or place customers in less-favorable products than they may qualify for. Bank interest rates list india That could lead to customers paying higher interest rates or incurring fees.

“We did this because we want to make certain that every single one of our customers has full confidence that our retail bankers are always focused on the best interests of customers — and get only the products they want and value,” regional spokesman Jim Baum told me.

I asked several other banks with branches in the Lehigh Valley how they were responding to the Consumer Financial Protection Bureau’s warning.

“Like other banks, Santander is reviewing its sales practices and compensation incentives to make certain that we only encourage the right behaviors,” spokeswoman Ann Davis said.

“KeyBank employs a wide range of incentives that are focused on ensuring that our employees provide superior service to our clients,” spokeswoman Helen Tederous said. Allahabad bank interest rates on fixed deposits 2013 “We look at client activity and engagement, but our internal scorecards do not track products per household from an incentive compensation standpoint.”

BB&T referred me to comments that Chairman and CEO Kelly King made in September at an analyst conference. Bank home loan interest rates in india 2013 King said then that the bank felt “really, really good” about how it handles incentives.

“I’ve been involved with this for a long time and our system is, I think, properly balanced and I think we aggressively try to understand needs and then we very carefully try to consult with clients and let them decide if we have products/services that meet their needs,” King said.

You should learn from the government’s warning, too, by understanding the potential to be pressured into signing up for a product or service you don’t need or don’t understand.

If you are asked about a mortgage refinancing, credit card or account you don’t want, politely decline and end the conversation. Saraswat bank fd interest rates 2013 Never sign paperwork without reading it from top to bottom, including the fine print.

If you run into a problem, you can file a complaint with the Consumer Financial Protection Bureau at www.consumerfinance.gov/complaint/ or (855) 411-2372.

The Watchdog is published Thursdays and Sundays. All bank interest rates for fixed deposit Contact me at watchdog@mcall.com, 610-841-2364 or The Morning Call, 101 N. Highest bank interest rates in usa Sixth St., Allentown, PA, 18101. Bank of india fd interest rates 2013 calculator I’m on Twitter @mcwatchdog and Facebook at Morning Call Watchdog.

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