SYDNEY, Jan. 19 (Xinhua) -- Australia's banking sector has been warned that their aggressive sales tactics and incentive-based bonus payments are a "problematic initiative."
Frontline service staff are encouraged to sell home loans, deposits, credit cards and insurance plans in order to meet financial targets and receive bonuses, called "accelerator payments," according to a report released Tuesday.
The report, conducted by Australian Public Service Commissioner Stephan Sedgwick, warned of "increased potential that a poor outcome will ensue for at least some customers."
In particular, the report focused on "cross-selling," whereby bank staff sold multiple products to customers even if they did not originally want it.
"Such gateways powerfully increase the risk of poor customer outcomes as the individual will not receive any of their reward unless minimum sales targets are met. The risk would seem to be higher where cross-sales targets are used for this purpose," Sedgwick wrote.
Following the warning, the Commonwealth Bank of Australia, the country's largest bank pledged to implement Sedgwick's recommendations.
"We are committed to implementing Sedgwick's recommendations from the final report in line with the industry commitment ... and that the way bonuses are paid to Commonwealth Bank branch staff by removing any direct link to the number or value of products they sell and the bonus they receive," the bank said in a statement to Xinhua.
"This means our customers can be confident that our branch staff are not being paid to sell them products they may not need."