help please from people who work in bank/building society

ses6jwg

It is my personal opinion that "fee-paying" bank accounts will probably become "the next PPI scandal".

It is certainly the case that we are expected to follow a very strict set of sales standards and colleagues in other banks say the same. My sister upgraded to a Natwest fee-paying account recently and she was taken through a very similar set of sales processes i..e. a signed declaration. This has without doubt tightened up massively over the last 3-6 months.

Unfortunately across all walks of life you get people that take advantage of those less able to comprehend such matters, if it means they will get a nice shiny iPod from it.

I myself have a bit more of a conscience and if I am under target and a product is just not right for a customer I would rather not "hard sell" it, miss out on bonus but clock off at the end of the day with a clean conscience and a good nights sleep.

grizzly1911

I really don't understand why people would take up a fee paying current account when stand alone options are available.

A lot of the combined products that are insurance backed have a number of limitations and can be obtained elsewhere more comprehensively.

I suppose if you are a heavy O/D user and it buys you lower charges/fees then that may be relevant.

Cross selling is nothing new, we did it 30 years ago, but the "profit" would be taken from the cross sell, that gave the customer a direct benefit and long term relationship, rather than just take a fee and move onto the next.

One of the reason for subprime mortgages where"brokers" were more interested in fee for selling the product, securitising the debt, rather than taking a long term interest/responsibility for the debt and client.

opinions4u

grizzly1911 wrote: »

I really don't understand why people would take up a fee paying current account when stand alone options are available.

Price and convenience come to mind.

Sometimes it's cheaper.

It's certainly easier.

grizzly1911

opinions4u wrote: »

It's certainly easier.

For those that make a conscious decision that's fine.

ses6jwg

I have a fee paying account.

I realise that if I shopped around I could probably save a little bit on it, but I am quite happy to pay a slight premium (probably not more than 10 or 20 pounds if I am being honest over what they would cost separately) just to have one number to call, no renewals to worry about etc etc. It is just there if I need it.

I had to claim on the breakdown cover on my bank account recently and it was one number called, all arranged and sorted within 10 minutes.

pqrdef

For insurance companies, the worst kind of customer is the self-selected customer who buys the insurance because he figures it'll be profitable - his car is a badly-maintained old banger, or his teeth aren't in the best state, or he's lost three mobiles already.

The best customers are those who don't have any use for the insurance, but take it as part of a package.

The insurance companies know this and price accordingly. So the kickback that the banks get for marketing insurances through fee-paying current accounts depends on a predictable proportion of the insured being no-risk customers. Then the banks have to keep their side of the understanding by ensuring that the customers they pass on do in fact fit the expected statistical profile, otherwise the deal isn't going to work.

jambosans

pqrdef wrote: »

The insurance companies know this and price accordingly. So the kickback that the banks get for marketing insurances through fee-paying current accounts depends on a predictable proportion of the insured being no-risk customers. Then the banks have to keep their side of the understanding by ensuring that the customers they pass on do in fact fit the expected statistical profile, otherwise the deal isn't going to work.

Aside from the lesson in how insurance works, I would argue the highlighted part of your post gives banks a little more credit than they are due.

I have never come across any sort of vetting process for packaged current accounts that screens for customer's less likely to claim on the insurances. The prompt systems I've encountered normally reference the internal score of a customer (if at all), and other basic details, such as age, account type, etc. So as you can imagine, unless there is a marketing opt-out in place, most customers with a current account will normally come with a packaged account prompt (along with a host of other products).

The ratio of claims to policies held takes care of itself, and I wouldn't suggest for a moment this had anything to do with the member of staff's motivations for selling the Reward Account.

I'm with all those suggesting a complaint. The product was inappropriate, and should not have been sold to a customer who could be considered vulnerable.

pqrdef

jambosans wrote: »

I wouldn't suggest for a moment this had anything to do with the member of staff's motivations for selling the Reward Account.

Neither would I. But when the bank is doing its product design and marketing strategy, it knows which side its bread is buttered. A commercially successful product isn't one designed to attract customers who will benefit from it at the provider's expense.