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.
Consumers International joined world leaders at the World Economic Forum's Annual meeting in Davos, 21-24 January 2020, to ensure that the global consumer voice was represented in high-level discussions on privacy and digital rights, sustainable consumption, plastics recycling, the future of food, finance and energy.
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To coincide with the release of our latest report Banking on the Future: an exploration of FinTech and the consumer interest, we list ten things consumers need to know about FinTech.
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