Bank client's annoyance points to need for single financial regulator
We have all had those phone calls from the bank - someone trying to sell us an insurance policy or a pension scheme. This cross-selling of various financial products is how banks boost their profits these days.
But here is a cautionary tale from a reader who was driven to making a public scene at his bank after being sold an insurance policy. McArthur Chan has been a customer with the lender for more than 20 years. He has deposits, credit cards and a mortgage with the bank.
Several months ago, he received repeated phone calls from a staff member trying to sell him an insurance savings product. Eventually, the hard-sell tactics paid off, and he agreed to take out a policy with a monthly premium payment of HK$300 on autopay.
A few days later, he decided he did not want the policy and so rang the bank and cancelled it under the 21-day cooling-off-period rule. However, the next month he found that HK$300 had been deducted from his account. He tried to phone the person who had sold him the policy but was told he no longer worked at the bank. He then spoke to the manager, who promised to fix the problem and return the money to his account.
Unfortunately, when his statement arrived the next month, he saw that instead of his money being returned another HK$300 had been deducted from the account.
He went to the bank's headquarters to demand the autopay be stopped and his money refunded immediately, but when he got there he found he was surrounded by so many protesting Lehman minibond investors that the bank staff had no time for him.
It was only when he lost his temper and began shouting louder than the minibond investors that a senior manager was called to attend to his complaint.
'I do not mind bank staff selling me insurance products. However, if they do so, they need to make sure that customer services are available. I do not understand why it was so difficult to cancel the policy. When the member of staff was trying to sell me the policy he called me all the time, but when I wanted to cancel it I could no longer contact him. I will never buy insurance from a bank again. I will go back to my insurance agent, whom I can always call.'
Chan's experience is yet another example of why there should be a single regulator governing all financial products.
The banks, which hold all the depositors' data, can sell them anything from stocks and mutual funds to insurance products, but there is no regulator to make sure the customers are treated fairly.
Yes, the Hong Kong Monetary Authority is there to license the banks and to make sure they are financially sound, but its focus is not on the lenders' selling practices or how to handle customers' complaints.
The authority admitted this month that, under the Banking Ordinance, it could not name and shame the six lenders it had uncovered that had sold personal data from 600,000 customers to insurance companies for marketing purposes. This is not good enough when it come to protecting customers' interests.
However, we fear it is going to take a lot more than making a public scene at a bank to change the government's mind.