Members of Committee for Better Banks met with US lawmakers on June 10 to brief them on a new report that criticizes big banks for using an overly aggressive quota system that forces bank employees to pressure customers into accepting unneeded banking products that include high fees, one of the biggest sources of bank revenue.
The report entitled “Banking on the Hard Sell” was published by the National Employment Law Project (NELP)and commissioned by the Committee for Better Banks, an organization of frontline bank employees and consumer advocates that was started by the Communication Workers of America (CWA).
“Eight years after the financial crash, Wall Street CEOs and shareholders are filling their personal bank accounts with earnings from immoral and exploitive bank sales quota systems,” said Anastasia Christman, deputy program director at NELP and author of the report. “Big banks are using frontline workers to pull the wool over ordinary consumers’ eyes. Americans trust bank tellers, but these individuals face the impossible choice of pushing high interest credit cards and other predatory ‘products’ just to keep their jobs.”
Christman analyzed industry data, reviewed class action lawsuits, and interviewed dozens of frontline bank employees including tellers, customer service representatives, personal bankers, and others.
Those she interviewed told her that bank employees work under heavy pressure to meet their sales quotas, which determine how much commission they’re paid.
Commissions are an important piece of employee compensation because base pay is so low.
According to the report, the median average wage of bank tellers is $12.44 an hour.
Employees interviewed for the report said that sales quotas are often unobtainable, set arbitrarily, and increased without notice or explanation.
Employees also said that they were constantly hounded to by management to pressure customers to sign up for bank products like credit cards, consumer loans, and overdraft protection that come with fees and high interests rates.
Wells Fargo, one of the banks identified in the report for its predatory practices, encourages its frontline workers to sell its fee-bearing banking products as “solutions” to customers facing financial problems.
According to the report, fees have become a major source of bank revenue. For Wells Fargo, fees and service charges generate one-quarter of the bank’s revenue.
At Wells Fargo, the average household with an account at the bank has been enrolled in more that six banking products. Corporate leadership wants to push this number up to eight, and they want these extra banking products to be those that generate fees.
In establishing sales quotas, bank management exclude the basic products that most customers want from a bank, low-fee accounts, ATM cards, etc. and instead make their fee-bearing products the quotas major component.
Pressure to load up customers with fee-bearing services has put employees in a bind. Failure to sell “solutions” to customers means lower commissions and more pressure from upper management.
This kind of pressure has caused some bank employees to take shortcuts that harm customers.
The Los Angeles Times reports that Wells Fargo employees “facing strict quotas and fearing for their jobs, sometimes opened unneeded accounts for customers, forged clients’ signatures, and pleaded with family members to open accounts.”
The Los Angeles City Attorney in 2015 sued Wells Fargo after the Los Angeles Times exposed the bank’s questionable practices. The suit says that the bank’s sales goals had encouraged “unfair, unlawful and fraudulent conduct.”
While some bank employees may have cut corners to meet goals, the overwhelming majority do not.
Those who belong to Committee for Better Banks are taking it one step further by fighting to end the banks predatory practices–both those that affect employees and those that affect customers.
“When I came to the United States as a refugee, I was excited to find what I thought was a good job at a major bank, but the pressures we face keep me up at night,” said Khalid Taha, a Wells Fargo personal banker and a member of the Committee for Better Banks who briefed lawmakers on June 10. “If Wells Fargo is serious about serving customers, then it should listen to us — the professional customer service representatives on the frontlines. I want to help customers without worrying that I’ll lose my job if I don’t sell an insane amount of credit cards and loans.”