Banks told to audit cross-selling in wake of Wells Fargo scandal

The corporate regulator has written to banks asking them to review their cross-selling practices to ensure Australia doesn’t have a Wells Fargo-type problem.

Wells Fargo based in San Francisco has been embroiled in a phony-accounts scandal which has been blamed on its practice of offering employees incentives based to opening new accounts.

Australian Securities and Investments Commission chairman Greg Medcraft told a parliamentary committee hearing on Friday that he had in the last week written to the the big four banks plus Suncorp, Citi, HSBC and Bank of Queensland to ask them to audit their cross-selling activities.

Cross-sellling refers to the sale of different types of products to existing customers.

A customer with a savings account might be encouraged to buy superannuation, loan and insurance products from the same bank, for example.

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