A senior executive of the Commonwealth Bank of Australia has admitted to the Banking Royal commission that the bank failed to act in the best interests of customers in relation to the sale of credit insurance.
CBA general manager of retail products Clive Van Horen told Commissioner Hayne 64,000 credit card insurance policies were sold to pensioners, students and unemployed people, who were ineligible to make claims on the policies.
Under sustained questioning by Counsel Assisting Rowena Orr QC, Mr Van Horen finally conceded: “It was a breach of our obligation to act honestly, efficiently and fairly.”
The CBA executive admitted those purchasing the insurance would have had to be employed to claim on the policies.
He said the bank pushed sales of the policies by offering staff bonus awards of iPads, iPhones, JB Hi-Fi vouchers and payments to staff social funds.
Finance Sector Union National Secretary Julia Angrisano said it was bank workers’ jobs at stake and not iPads or iPhones.
“What we are seeing here today is the toxic sales culture at CBA which permeates down from the remuneration structures of the CEO and senior executives,” Ms Angrisano said.
“Pay models and incentives linked to the sales of financial products is pushed by management in every customer interaction,” she said.
“The employment of CBA bank workers is subject to meeting targets.”
“Many of our members have expressed the concern they feel as they are required to either sell inappropriate products to customers, who they know doesn’t need or can’t afford them, or alternately, jeopardise their employment by failing to meet these targets.”
“We hear often from workers who are under constant scrutiny and pressure about the levels of sales targets imposed on them.”
“There is a constant threat of being placed on a performance management program which can result in a worker losing their job because they did not sell enough debt related products.”
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