One of my biggest pet peeves is financial companies abusing its customers. Behemoth institutions preying on and exploiting the vulnerabilities of the public is unconscionable. The blatant abuse of power is more common than you think and we're going to explore its root cause and how to protect yourself.
Let's dive in!
American Express joins the naughty list and the company of Wells Fargo and TIAA for defrauding customers.
Here’s the deal: Currency trading is one of Amex’s significant businesses. To that end, clients would enter at one rate and Amex would surreptitiously raise the rates.
I know what you’re thinking. Without mentioning names, certain utility companies do this all of the time. You’re blinded by attractive introductory rates and when you weren’t paying attention, your introductory period expired and you’re now paying full-price.
Instead of allowing time to pass you by, Amex customers were never informed that their rates were temporary or subject to change.
All of the honest people out there are left wondering why. Well, it’s simple and all traces back to greed. Higher customer rates yield higher advisor commissions. This is not in a financial services vacuum either. I venture to guess that with some reflection, you’ll discover that this happens in your industry as well.It boils down to this:
The way that people are incentivized will drive the way they treat you.
When companies incentivize employees to the detriment of its customers, ethical dilemmas are bound to surface. No one wins here.
It’s only when these nefarious companies get caught with their hands in the cookie jar that artfully worded statements of contrition and denial bounce around the media.
Well, I don’t buy the rhetoric. Here’s how to protect yourself from an advisor and/or an institution taking advantage of you:
Gotta get a fiduciary
You want one of these in your corner. But what is it? Who is it? A fiduciary is a licensed individual who is legally bound to act in their clients’ best interests, otherwise, they are held culpable.
Don’t let a company sell you a bill of goods and sweet talk you using similar language from a fiduciary pledge. Consider yourself on a fact-finding mission and don't relent until you learn the answers you want to hear.