US Bank Wells Fargo fined $185 million for toxic-sales culture
Customers at USA Bank Wells Fargo had accounts opened for them, money transferred and credit cards issued in their names, without their knowledge or consent.READ MORE
Inappropriate sales incentive schemes are part of a toxic banking culture that promotes high risk, short-term gains, and contributed to the 2008 financial crisis. Banks create sales incentives to encourage staff to sell more financial products and are often developed with no regard for customers' needs. This has led to mis-selling and irresponsible lending, the most catastrophic example being the inappropriate selling of mortgages to US consumers who couldn't afford the repayments: widely recognised as a trigger of the 2008 financial meltdown.
Our 2014 report Risky business: The case for reform of sales incentives schemes in banks (eng), called on global financial retailers and regulators to take action on sales incentives.
Drawing on evidence from consumer organisations, trade unions, banks and regulators in G20 and OECD countries, it argues that inappropriate sales incentives schemes represent an unacceptable risk to consumer protection and financial stability.
The colossal compensation bills and losses to consumers, already measured at more than US$53 billion globally, are a clear indication of the scale of the problem.