Mis-selling: What is it?
According to the RBI, mis-selling is defined as:
1. Selling a product or service that is inappropriate or unsuitable for the customer's profile, even if the customer has given their express assent;
2. Selling a product or service without supplying accurate or comprehensive information, or by providing misleading information;
3. Selling a product or service without the express approval of the customer;
4. Selling a desired product or service while forcing the sale of another product or service;
5. Selling a product or service that includes any additional elements deemed to be mis-selling by the relevant financial sector regulator.
Third-party Financial Product or Service is a product or service offered by a bank to its customers on behalf of a third party company such as selling insurance on behalf of an insurance company.
Guidelines for DSA
A bank, availing the services of DSAs / DMAs, shall maintain an up-to-date list of DSAs / DMAs empanelled / engaged with it. Such list shall include the name and other details of the DSAs / DMAs, the period of engagement, etc. Further, an updated list of such DSAs / DMAs shall be displayed on the bank’s website for reference by the members of public.
A bank shall ensure that its employees or DSAs / DMAs:
- make telephonic contacts and / or visits to customers normally between 09:00 hours and 18:00 hours. Calls / visits earlier or later than the prescribed time period shall be done only when the customer has expressly given a request or authorisation to do so;
- do not call a customer regarding products already sold to him / her and if a customer calls for any such product, advise him / her to contact the customer service staff of the bank and provide the contact details.
No Incentive
A bank shall ensure that its policies and practices (e.g., organizing competitions among business units for sale of products / services, earmarking specific days of the week / month for targeted selling of particular products / services, etc.) neither create incentives for mis-selling nor encourage employees / DSAs to ‘push’ the sale of products / services. It shall be ensured specifically that no incentive is directly / indirectly received by the employees engaged in marketing / sales of third-party products / services from the third-party.
