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Banks Pushing Insurance Policies Annoys Customers

Banks Pushing Insurance Policies Annoys Customers and Risks Threatening Data and Personal Security

MoneyHub continues to receive complaints from readers who feel their banks are being irresponsible and annoying by pushing their staff to sell insurance during routine customer interactions. MoneyHub calls on this practice to be regulated with banks to offer an ‘opt out’ policy to discontinue nuisance pestering.

MoneyHub senior researcher Christopher Walsh says:

“Bank tellers asking customers if they want insurance is not only a nuisance, it is a massive security risk too. If a customer agrees to get an insurance quote, very personal details will be asked over the counter, such as income, address, family situation, job title, other sources of income – and anyone can be listening to these answers. If I’ve told the bank my salary and living situation, as well as my assets and debts, I have no control of who heard that, what the bank will do with that information and what a stranger can do this with information as well”.

“If a customer agrees to get an insurance quote, the customer has no idea if the policy price is reasonable or not, nor understand the terms of the policy and exclusions. A customer, in our view, cannot make an informed choice because of the sales process. There is pressure to buy the policy and not everyone has the willpower or patience to refuse”.

“Banks need to realise that customers running errands have zero interest in buying insurance when they visit the branch for an unrelated purpose – if they did, they would ask for it. MoneyHub is demanding that banks offer an opt out option for customers so that their visits to the banks can be efficient and fair”.

“Banks are likely to be pushing their staff to meet sales targets, and insurance is indiscriminately offered without full consideration for whether the customer needs the product or can even afford it. A reasonable person may see this as the banks simply selling the customer what they don’t already have and the customer’s best interests are not at the forefront of the sales pitch”.

“Selling debt to people who couldn’t afford it underpinned the last financial crisis, but it seems banks are focused on profits over their customers’ needs. And then there is the question of whether the banking tellers are the best people to be selling insurance in the first place – are they equipped to answer non-standard questions, or are they even trained in insurance?”

“MoneyHub has heard from New Zealanders nationwide who have been pestered at banks when it comes to being offered insurance. We want to bring this situation into the public domain to get the banks to stop this behaviour, or at least give the customer the right to never be asked. In some cases, we’ve heard of people buying policies out of politeness because the bank teller had helped them with their standard query”.

“First Union’s recently published survey data confirms that overall, 87% of respondents reported feeling pressure to sell financial products; and 92% feel the same or more pressure to sell financial products than they did a year ago (50% more; 42% the same). The survey results suggest it is profits before people on planet bank”.

The responses by Bank were as follows:

BankDo you feel pressure to sell financial products?Do you feel more, less or the same pressure to sell financial products now than you did a year ago?
ANZYes – 82%

No – 18%

More – 45%

Same – 45%

Less – 10%

BNZYes – 93%

No – 7%

More – 64%

Same – 32%

Less – 4%

WestpacYes – 89%

No – 11%

More – 40%

Same – 50%

Less – 10%


Source: First Union, June 2018

“In a recent personal experience, a bank teller made life insurance the focus of the conversation without asking about my family situation or need for the product – both a big no-no when it comes to selling life insurance”.

“MoneyHub’s in-depth reports and media presence in the last 6 months have led to modifications of a number of consumer finance products which have benefited the customer. We want to make the banks aware that most of their customers are not interested in being cross-sold insurance when they visit a branch, and we want the customers to be offered the right to be excluded from a sales pitch”.

“In the meantime, MoneyHub suggests customers use the world NO when being touted financial products, repeating the word calmly and politely to naturally end the conversation. This is the fastest wait to give the customer control of their visit to the bank”.

More: MoneyHub analysis of Life Insurance, Contents Insurance and Travel Insurance

ENDS

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