Financial Daily from THE HINDU group of publications
Wednesday, Mar 17, 2004
Financial Daily from THE HINDU group of publications Wednesday, Mar 17, 2004 |
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Money & Banking
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Outsourcing Marketing - Trends When outsourcing can be dicey Poornima Mohandas
Mumbai , March 16 Never pay cash to a sales agent who comes selling a home loan or a credit card. The persuasive sales man may demand cash claiming it is for a processing fee but be sure to give only a crossed cheque." Such an instruction can be expected from banks in the near future. There have been incidents where sales agents of banks have collected cash up to Rs 5,000 from naïve customers promising him/her a home loan or a personal loan from the bank. Such agents, who might carry a visiting card bearing the bank's name, extract cash and vanish with it. The customer after a patient wait for some communication regarding the loan/card contacts the bank. Only then does the bank come to know that the agent has duped the hapless customer. The incident is then reported to the police. According to bankers, the processing fee should ideally be paid through cheque in the name of the bank. This would give proof of payment and would also make the funds inaccessible to the agent. "Surprisingly such incidents of customers paying money to sales agents have been reported from across the country, even in Mumbai. It is commonplace in the market with all banks having sales agent many of whom are not loyal to the bank," confided a private bank official. Most private banks have outsourced sales to large commission agents or to direct sales agents (DSA) with retail business requiring feet on the street. These agents sell products of several banks simultaneously with little loyalty or accountability to any of them. For them it is just a game of volumes since they get paid in accordance with the numbers they bring in. "When such incidents are reported to the bank, we honourably pay the money to the customer since he/she trusted the name of the bank and paid it," said the bank official. "Forget a few thousands, suppose the sales agent had taken the documents and misused them to apply for a loan in his name. The extensive use of DSAs is a very dangerous situation where there are numerous opportunities for fraud," said an official from a housing finance company. All the new generation private sector banks have hired thousands of direct selling agents to aggressively sell their retail products since all of these banks have limited branch networks of a few hundreds. Large portions of their asset books have been created through these agents. Private bank officials insist they invest in these agents by training them and that there are sufficient checks and balances to keep this sales force under check.
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