ASIC’s report into the scandalous sale of consumer credit insurance (CCI) to banking customers is proof that self-regulation won’t fix the deep-seated cultural problems in the major banks.
Finance Sector Union of Australia (FSU) National Secretary Julia Angrisano said bank workers were under intense pressure to sell CCI to customers and this report has revealed the enormous profit motive for managers who pushed these products, no doubt receiving large bonuses themselves for meeting targets.
“The banks have only themselves to blame for now being exposed to $100 million in compensation payments.”
“This case shows they exploited their customers and staff to the point where the enormous profits being generated by worthless CCI drove poor outcomes.”
“Our members were being pushed to sell CCI to customers. Staff who lagged behind were placed on performance management programs to force them to sell these products even harder,” Ms Angrisano said.
“This is an example of the rotten core of our banking system revealed so starkly by the Hayne Royal Commission and the FSU supports moves to force banks to clean up this shameful practice.”
Ms Angrisano said the ASIC review on its own, was not going to adequately deal with the problem because it was clear the banks would still be selling some CCI products.”
“What is needed here is tough government regulation to prevent these kinds of excesses because self-regulation has failed in the face of the banks’ rush to enhance their bottom line.”
“This has come at the expense of customers and staff.”
“The big question is, having been dragged kicking and screaming to establish the Banking Royal Commission, when will Morrison and Frydenberg have the courage to implement reforms to stamp out this kind of shameless exploitation?”
Media contact John Hill 0412197079