The growing consumer awareness means that dishonest sellers are forced to go to the good side of power and limit their unethical practices. Companies, also in the finance and insurance sector, try to focus on how to best match their products to the expectations of customers. It’s no secret that only a satisfied customer will use the services of the same institution again.
Everyone who feels disappointed or deceived will not only go to competition, but also, as often happens, will try to prove their rights in court. This is the result of unnecessary, profit-oriented activities that will negatively affect the company’s image. Let’s find out what misselling is and how to avoid it.
What is misselling?
Probably not many of us have ever had contact with this concept, but probably everyone got to know it from the practical side. Misselling, translated from English, is a mistake. It means that customers are sold products and services that do not match their needs, so they often pay more than they should.
It works a bit like selling telecommunications packages to the elderly. Some of them only need a subscription to digital TV. They are not interested in monthly internet access payments and paying landline bills, because the children bought them a cell phone. At the same time, they have difficulty refusing a consultant, which ends with signing a contract for all these services and spending money on products that will not be used.
Another example from the financial industry. Let’s say we are retired, but for some reason we don’t have creditworthiness, so we decide to pay for payday pay. In this situation, misselling will be selling us additional unemployment insurance (!) Or simply not informing us how a given financial product really works. The loan agreement will be signed, the consultant will receive a commission, and we will bear the consequences of such actions throughout the period for which we were granted the loan. Or longer.
Causes of misselling
Still very many salespeople look at the selling process in a short-sighted way. They are focused on quick profit, not on building valuable customer relationships that could result in an increase in their interest in company products. That is why we have to be especially careful wherever employees earn thanks to commissions.
Most of them are focused on multiplying their own money and are not interested in what will happen to ours. The land for us to sign a credit insurance or loan agreement. Even if some agents or consultants try to act honestly, we must remember that a company may require them to meet certain monthly standards, which ends in exactly the same way: you must sell at all costs.
How to stop misselling?
To intensify these activities, e.g. effective sales trainings are organized, in which manipulation techniques are improved – thanks to them there is a chance that the customer will agree even to an unfavorable offer. All the more so because many of us read contracts inaccurately, because, after all, we assume that there is an honest person on the other side.
What’s more, we become victims of misselling because of our ignorance. We do not know what rights we have in connection with, for example, early termination of the loan agreement or submitting a complaint. In addition to supplementing this information, what else can we do to guard against misselling?
First of all, make informed decisions. It is a fact – agreements in loan companies and banks are written in a specialized language and often have the volume of a set of stories, but if we do not want to be cheated, we must grit our teeth and go through all the records contained in the documents. It is worth seeking advice on expert portals or using the services of a financial advisor – especially if a larger loan is involved.
Misselling in the light of the law
Misselling was once such a widespread phenomenon that decided to investigate. The practices used in the insurance and consulting services sector are examined. It turned out that as many as 20% of insurance agents sell (or at least offer) services to their clients that they do not need or even do not want.
The reason is the financial rewards we have already mentioned for sellers in exchange for the contracts signed. Interestingly, the study revealed that the problem of misselling largely affects people working within their own business. The larger the company, the lower the risk of falling victim to such practices. Researchers also warn against excessive trust in very young people – they are most prone to dishonest play.
The Office of Mango protection watches over the subject of misselling from the legal side. Last year, an amendment to the Act entered into force, which introduced a ban on the use of missellig – thanks to which sellers are obliged to offer customers services tailored to their needs and capabilities. Verification takes place, among others through the institution of the mystery shopper. From 2016 protection of the financial products of the mite also the Financial Ombudsman.
Before we decide on loan insurance, installment loan or payday loan, it is obligatory to read the basic information about them. This will help us avoid buying unnecessary products and vice versa – get interested in those that are most beneficial for us.
Applying for a bank loan for a large sum is associated with the same risk for both parties: we, as customers, and the bank must take into account that at some point (and for some reason) we may not be able to meet the terms of the contract. This is a situation when offering us credit insurance is not misselling – it is about spreading the responsibility for repayment of the loan between the bank and the debtor.
Financial institutions use credit insurance instead of bail, pledge or assignment. Such an additional element of the credit offer is a chance for us to obtain more favorable contract terms, because banks usually prefer bundling (the same applies to telecommunications companies).
Most popular added to the main product
Life insurance, accident insurance, loss of job, illness and permanent disability, insurance against low own contribution and so-called bridging – valid before the mortgage is entered in the land and mortgage register. Remember that we have no obligation to take out credit insurance. Consider this, however, taking into account factors such as the cost of insurance (payable once), its scope and the benefits we are entitled to.
And if for the bank the purchase of insurance is a condition for granting the loan, we can always secure the repayment in a different way. The most important thing is that the banking products we decide on are beneficial for us and that the contract they concern protects the interests of both parties concerned.