When you have been sold a bad financial product, what should you do?

Complain, right? NO. People do not. They treat it as ‘bad luck’ or justify saying ‘Oh Subra it is only Rs. 55,000 per month premium’ ..I mean anything except ACCEPT THE FACT that they have been had. Many of them do not like me for finding out that they have been sold a lemon. Imagine Subra telling their wife / colleagues about him being such a duh…that he has bought a lemon. It insults them and hurts their ego. So in many cases they will not even talk about it Loudly. They will just stop taking my calls.

Unfortunately in India most customers crib, then when they get a pat on the back from a high ranking official, they withdraw their complaint. I am yet to see a court order a full repayment for mis-sold policy and heavy damages suits. One friend who was sold a lemon was convinced by the CEO of the selling company that the product is not so bad after all – damn Subra – he is a cynic. Worst thing is it worked.

There is no fear of God in ANY company. If you do bring up the issue of mis-selling to ANY  CxO in the industry he comes up with “Oh ‘A’ is doing more than us or ‘L’ is doing more than ‘M’.

So will mis selling stop on its own? No. People behave in a way that they have been rewarded in the past (or at least not punished). So in a country where :

– the customer is so damn indifferent that he does not even know he has been sold a lemon

– the courts take forever to award penalties for such ‘minor’ offences

– the regulator has made the process of getting justice difficult

WHY oh why will a guy NOT mis-sell?

Into this scenario a financial services company has come out with an incentive system which will pay a bonus to a sales guy if :

– he can get 5 leads from existing clients

– more bonus if he can SELL more to the same client (normally companies insist on no. of  new clients brought ..)

– get clients for a meeting with product heads / risk heads  once in a while to explain their portfolio.

Sounds utopian? They also have a good system for internal counsel meetings for reducing mis-selling by an informal whistling system.

Why do all this?

Parent country where they are located is cracking the whip on bad behavior.

Will it work?

Too early to say, but short term profitability could suffer. Fantastic opportunity for trainers. Hey trainers are you listening?

Trainers polish your English, give international examples, speak slowly….look east!!

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