Given the banks’ primary objective is to maximise profit, how would charging a fee help? Just because the banks would make more money on one side, does this mean that they would reduce income from other sources?
Misselling occurs because selling is profitable for the bank. The staff are incentivised to sell and punished if they do not sell enough. The bank will continue to try and increase sales year on year by increasing targets. Selling more helps to maximise profits. This excessive incentive for staff is what results in mis-selling. Part of the problem is that staff move every few years, so have no consequence of mis-selling. Lack of good training is a problem; staff may not know the details of the products and are only taught how to sell it; an example would be exclusions for PPI.
- Limit or ban targets.
- Training for products would need to meet independent standards.
- Staff will need to be disciplined for mis-selling, maybe fined and have it put on a permanent record.
- Increase the fines for banks for mis-selling.
Charging customers to use a bank account will make no difference to misselling.