An interesting Email caught our attention. After running through it, we thought it will be value adding to our readers and hence, decide to publish it.
While the Email comes with photos and name of the bank, we will leave it out. It is the lesson learnt that we want our readers to focus on.
The title of the Email? Tricks used by Bank X’s Shady Bancassurance Specialist.
TL;DR –Ā Why Consumers may feel cheated?
Consumers get persuaded to buy additional things or things that cost more almost every day.
source: callboxinc.comĀ
So why is it that consumers are especially angry when it comes to personal finance products?
We once did a comparison between getting a wrong financial product and going on a bad date.
| Opportunity Cost | Bad Tinder Date | Wrong Financial Product |
|---|---|---|
| Cost | Transport Cost Cost of Dinner (Maybe movie tickets) | Capital losses Possible loss of interest earned (definitely more than the cost of dinner and movies) |
| Time | Time spent on Traveling Over dinner Movie | Some products can lock you in for years! |
| Cost of Exit | A Whatsapp message/SMS Maybe a slight heartache Or a huge sigh of relief But you are free to exit as and when. | A possible long process of online paperwork. More time needed for retirement planning |
It is important for sales representatives of financial products to know the implications they can get their client into if their clients take up a product which is not suitable for them.
As consumers, we should also put in the effort to read up more on financial products before diving into one. One can also use our Personal Finance Community Platform to get feedbacks on financial products.
Further reading: A letter to Seedly
Editorās note: Below is an Email from one of our Seedly Personal Finance Community Members depicting her journey with a bank representative from Bank X.Ā All information is from the point of view of the member.
Cold call from Bank X’s Representative
I received a cold call from a Bank X’s representative on 3 December, Monday.
The call lasted for 3 mins 40 secs. I usually will avoid any exchanges or communications when I pick up such phone calls. The representative started her pitch by telling me that she will love to upgrade my current regular savings account to one that can fetch me a higher interest rate. The upgrade is said to be Free-of-Charged and it works like a normal savings account, no lock-in period or whatsoever.
I thought that sounded like a good idea and it got me interested to find out more.
She proceeded to arrange for a meeting with me at the branch nearest to my home. Our appointment was scheduled for 4 December, and she also sent me a reminder text from her own mobile phone after we hung up.
What happened at the branch?
When at the branch, the representative started off the meeting with questions like “What’s your job?”, “Where do you work etc”.
Next, she went on to share more about the savings account.
She then progressed into up-selling and cross-selling by asking me “After you have transferred $50,000 into the new Savings Account, what do you do with the rest of your money in the old savings account? It’s such a waste to leave a big sum there as it only generates a 0.05% interest rate.”
She went on to lure me into this amazing plan that sounds totally like a typical insurance product.
Using the monthly premium of $1,000 as an example, she explained that if I chose a premium paying period of 10 years, I only need to invest $120,000 but I am secured a lump sum of $10,000 at age X while being able to enjoy cashback benefits of about $700/year and $5,400/year at different stages of the policy.
The representative marketed the product as a bonus from the company. This amount of money is good enough for a Japan trip.
At this point, I was a little confused. “How is it a bonus when I am getting paid from the policy that I am regularly committed to be paying for?”
She also explained that it is the best time to buy NOW asĀ Bank XĀ is offering aĀ discount for the first year premium. The promotion has ended in November, but she can appeal to the managers for an extension just for me. (Oh whoa, “thank you” very much indeed).
She went on and went on and pushed her way to close the policy sales on the spot.
As a consumer, my objective for the trip was to understand more about the Savings Account, not to be sold to some insurance plans. Hence, the experience was not a pleasant one.
I called her out on that.
Signing on those documents first
Feel disappointed about my reluctant to her sales pitch on the insurance product, she asked if she can update my financial profile and do the paperwork for applications of both products today.
- I may sign on those documents first
- But she will not proceed to submit until I give her the green light to do so
At this point, I wasn’t very happy with the service. My objective was to discuss about the new Savings account, nothing else.
Even an insurance agent will discuss my current financial portfolio before recommending me other products. Why is it that this Bank X’s representative asked nothing of that and try to assume that I will need the insurance product she is recommending?
She explained that the new Savings Account and Insurance policy comes in a “pair” (which is not true).
I told her that I am a very frank person and since this is the case, I will have to do some serious consideration if I will even take up the new Savings Account as I have always been an informed consumer, preferring to do my due homework before committing to anyone or any policies.
She also asked for my signature for the financial profile update.
I was ok to do that but then she requested my signature for the application of the insurance policy.
I told her I am reluctant to do so. She replied by saying she will very much need me to sign but it’s ok not to submit as she will have a hard time answering to her boss if I do not do so. She says her boss will ask her “Why today never meet any clients? No B&W no signature?.”
She needed my signature as a proof that she has indeed met up with me. I agreed to help her out as I know she also needs to be answerable to her branch manager.
It was really funny when she revealed how bad she felt and how scared she was by “forcing” me to do this. I told her very honestly that I am disappointed with this meeting as it was a waste of my time.
My point of view as a consumer
I am not keen on insurance products, only keen on the Savings Account she mentioned. If she wants to do financial planning for me, she should have mentioned it over the cold call. This is a very shady act in my opinion.
I am questioning myself if she did this out of desperation because this is how the bank runs their business, giving the front line staff unrealistic targets to meet, or is it just her who is dishonest?
Can you imagine if the very person sitting on the chair was your loved one who is afraid to speak up and challenge such shady sales staff or who is financially illiterate? They would have fallen for her tricks and get themselves into unnecessary inconvenience.
I also felt very harassed by this staff as she went on to probe how I manage to save X amount of money, “What is your husband doing, does he save as much as you or anywhere near your amount?”
What has my family got to do with her? How I make my own money. What has it got to do with her? I am here to learn about a savings account. Not to share or teach her how to accumulate wealth. This is clearly an intrusion of my privacy!
The very same night, I texted her to cancel all documents endorsed by me (she did not submit yet as I did not give her the go-ahead to do so). I told her it is clearly unethical to lure me into insurance products sales with the pretence of upgrading my savings account.
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