According to an industry insider, retail banks task their staff to 'hard sell' borrowing to customers through a sophisticated range of tactics designed to increase customers' level of personal debt.
The unidentified banking executive, who is described of having a wide and intimate knowledge of retail selling strategies, has told the BBC in an interview that banks put their profit before the wellbeing of customers.
In all my years of experience in the banking industry, I would say that consumers should be very, very wary of their banks. They put profits before the customer at every given opportunity, the whistleblower told the BBC.
The informer, a high ranking employee at one of the UK’s big five high street banks, said that staff are given clear incentives to sell products and that tactics such as automatically increasing credit limits are employed to lure customers into greater debt.
Furthermore, ‘financial health checks’ are excuses to cross-sell other products and credit card upgrades to gold or platinum status are used to garner customer loyalty, the whistleblower suggested.
In order to tackle the problem the insider believes banks should be exposed to criminal charges if irresponsible lending is proven against them.
The revelation comes at a time when UK charities have been warning of spiraling debt and the Office of Fair Trading has condemned the financial services industry for charging excessive penalty fees on credit cards.