‘Sell to them or you will lose your job’: Call centre employees for big banks reveal upsell pressures.
Employees say customer calls for help used as opportunities to load them up with more debt.
By Erica Johnson CBC News
A recent article by Erica Johnson of CBC News exposes a very disturbing situation regarding our main Canadian banking institutions. Bank call-centre employees claim that their jobs are at stake if they don’t ‘upsell’ customers who are usually just calling to resolve a problem of some kind with their credit cards. Whatever the reason for a customer calling a bank’s customer service line (e.g. online banking problems, stolen credit cards, identity theft, discrepancy with charges etc.) call centre staff feel that their jobs could be imperilled if they are not able to ‘upsell’ a client to a new product or service. Speaking from personal experience, I know this to be a fact.
An egregious example of this kind of activity was cited in the article when an elderly woman called to simply arrange a small loan for her son, and the call centre agent was pressured by her superior (standing behind her and listening in on the conversation on her headset) to sell her a Line of Credit in the amount of $250,000! Fortunately, the agent had a twinge of conscience and called the lady back to dissuade her from taking the LOC.
As you would expect a spokesperson for the bank in question insisted that such behaviour would result in the immediate termination of the supervisor and that ’employees with concerns can use a confidential ethics hotline without fear of retaliation’. And if you believe this, I have some Florida Ski Hills property I could sell you!
Unfortunately, this is only one element of the banks’ questionably ethical activities. As a Mortgage Broker, I often see the most egregious examples of malfeasance, perpetrated when clients are vulnerable, unaware of the facts and afraid of refusing the overtures made to them by the so-called ‘mortgage and loan experts’ at their ‘friendly’ neighbourhood bank. I have cited two of them:
- The Collateral Mortgage.
For example, if your proposed home purchase costs $600,000 and you only need a loan for $300,000, the bank may register the mortgage loan for $600,000, with the promise that, should you need additional credit later on, the process would be simplified by using the remaining $300,000 available, provided you apply and qualify for the additional credit. The problem with this is that when the time comes that the additional funding is required, circumstances may dictate that the bank is ‘unable’ to comply with the request. Result? The homeowner is not able to get secondary financing due to the fact that the bank has vacuumed up all the available equity in the property! The unfortunate client now has very few options left, short of re-financing the entire mortgage (and having to pay a usurious penalty to get out of the existing mortgage). Clients that I have spoken to are, for the most part, totally unaware that they even have a Collateral Mortgage until the moment arrives that they need to use their property equity. Most home purchasers sign on the dotted (Mortgage) line without questioning the content, particularly since they do not understand the convoluted legal wording in the documents, and simply wish to consummate the transaction as quickly as possible. Shameful!
- Bank Mortgage Insurance.
At the time of signing the mortgage, the home buyer is persuaded to purchase ‘Mortgage Insurance’ so that in the event of the death of the mortgagor, the remaining mortgage balance would be liquidated by the insurance. Problem with the banks’ insurance is that, while you are paying the same premium, month after month, the outstanding balance of the mortgage is descending. So let’s say after five years of paying this insurance to cover a mortgage amount of $500,000, your balance could now be many thousand of dollars less, but you are still paying the same monthly premium! Using the same duplicitous tactics as described above, the bank will happily take your money and make you feel like you have gotten a great deal. Horror stories abound in this regard as well when a mortgagor dies and the next of kin (usually a spouse) find that there is a loophole and the insurance won’t pay out. So, the bereaved spouse still has to pay the balance left on the mortgage, or will more than likely lose the home. My recommendation is always to decline the banks’ insurance, find an independent Insurance Broker and insure your own life for more than the mortgage amount. That way, the pay-out will remain the same even as the mortgage balance is descending.
As a potential home buyer, you need to be aware of the pitfalls involved in purchasing a property. The self-serving banks have only one product to sell – their own, which may or may not be the best solution. An independent Mortgage Broker has a variety of lenders at his or her disposal, with a range of products that may be much more suited to your needs.
Remember – ‘Caveat Emptor’ (buyer beware!).
