A Project On

“Unethical Business Practices”

Submitted To:
Prof. Cyrus Gonda

Submitted By:
Pooja Thakur
Ramsha Ansari
Roshani Upadhyay
Sampada Kadam
Shagufta Khan
Shantarupa Parmanick
Swapnil Chavan
Zarina Chaudhary

Rizvi Academy of Management

(Batch: 2009 – 2011)
Industries Analysed:
 Banking

 Hospitals

 Heat Ventilation Air Conditioning

 Logistics

 Recruitment Consultancies

We have collected examples through interviews and news paper releases. Comic Strips
from the internet are added here to provide satirical humor related to ethics. 
 Banking Sector

1. Producing false documents for getting loans

Many times false documents are produced in the banks for the purpose of loan
clearance.

2. Improper information regarding the transaction

No proper information is given to the customers regarding the deduction of money
from their account regarding some transactions.

Few articles collected:

3. BBC hits the banking industry again… this time uncovering unethical sales practices
at Barclay’s……..!!!!!!!! (March 22, 2007)
BBC covered a series of banking unethical sales practices designed to keep people in
debt. Most disturbing, at least eight recent customer suicides were directly blamed
on the sales practices.
It discusses about unfair and misleading credit card marketing and fees. This includes
misleading credit card policies, with gimmicks intended to increase the likelihood of
being able to ding customers with $39 “late payment” fees by moving the time of
day earlier by when a credit card bill must be paid, or making the pay by date fall on
a Sunday, which means unless the payer pays by Friday morning, they are assured to
get a late fee assessed.
Last summer we recommended to our financial services industry clients that they
include sales practices and brand damage potential as part of their compliance and
ethic risk assessments. We also posed the question to Ethisphere readers in light of
the BBC whistleblower report: “at what point would a bank be liable for emotional
distress [or worse] by a customer due to its lending practices?”

4. ICICI Bank Credit Cards: Recurring Unethical Practices

It is unfortunate that ICICI bank engages in unethical practices on a recurring basis
that go against the norms of standard banking practices anywhere in the world.

Even after repeatedly bringing this matter to the notice of their enthusiastic
customer service executives but they refuse/express inability to help
('ICICICARE=032-836-455). It is not understood how interest charges are applied by
 the bank can be regarded as a "retail transaction."

For instance, the bill is generated on the 5th and the credit limit is exceeded after
application of the month's interest which is fine. However, the unacceptable part is,
an over limit charge is applied on the 7th (without even giving a chance to the
customer to pay!) This has also happened several times in the past and is again
happening with some of the customers since the last 3/4 months.

Customers wrote to their Nodal Officer Shiva Tadikonda but he has also not
responded yet, though telecallers remind customers of their payment duty. Some
Customers facing this problem also have written to Tadikonda that they would like
them to invalidate the useless card and that they would be paying their dues in
convenient installments.

5. Chase Bank - Unethical Practices

Chase has got to be by far the most unethical, disrespectful bank. They are greedy
and want to maximize their profits at the expense of the consumer.

The situation involved is about the credit card. They charge late fees, an over limit
fees, and various other finance charges and fees.

A customer faced the same problem he chose to use their online service to transfer
money from other bank account to his credit card account, held by chase. Chase
charges a fee for this transaction. So, the customer’s account was over the limit.
Chase also charged him an insufficient funds fee. The customer disputed this and
sent them a bank statement PROVING that there was money in his account at the
time and there is no way that the account had insufficient funds.

The customer finally closed the account and paid it in full. But the fees never
stopped.

“Did you know that if you have a balance on your chase account, you will have to
pay compound interest on that dollar amount regardless of how its computed”?
 Eg:

 If you closed your account, which you should do, and you paid the balance in full,
the interest that was charged will still be valid on that account.

Lets assume that this interest amount is $100

If you pay that $100, you will receive a bill the next month, charging you interest
on that amount that you owed, this cycle will not break, until you pay them more
than they bill you for and hope to get a refund check in the mail.

Customers are very dissatisfied with chase, and have done everything in their
power to make others aware of their business model:

GET AS MUCH AS YOU CAN FROM THESE IGNORANT PEOPLE WHILE THE
PICKINGS GOOD

6. Unethical conduct of HSBC Bank

This is to bring to your kind notice an instance of the unethical and unfair trade
practice of the HSBC Bank in India.
A Customer had opened an ordinary Savings A/C No. 024212672006 with the Bank in
Kolkata a few years ago.

However, the Bank had unilaterally upgraded it to a Power Vantage A/C without the
customer’s explicit approval. Now, on July 29, they debited my A/C for Rs. 827.25 for
non-maintenance of AQB of Rs. 100000/- when it is actually Rs. 25000/- as per their
list of Serv. Charges for an Ordinary Savings A/C, which the customer had always
maintained.

When the customer wrote to the Bank via e-mail about the above, they stated that
since the customer had used their new Debit Card, the Serv. Ch. debited could not
be reversed.

But, the fact is that they sent the customer the new Debit Card stating that the new
Card was being sent because the Bank endeavored to serve its clients in a better way
and bring more advantages to them.
 Moreover, the card does not bear any mention of the term ‘Power
Vantage’ and the customer was never informed about the change in the AQB that he
was supposed to maintain.

7. Bank of America’s Unethical Fee Practices - Checking Accounts

Here are some of the unethical practices practiced by “Bank of America”

-placing unsubstantiated "holds" on deposited funds, even funds from other banks,
for the purpose of delaying deposits and collecting "insufficient funds" fees.

-not updating the online system, so that balances that show as positive are actually
not positive and users overdraw accounts and incur fees

-Of most concern is a practice I cannot prove but suspect: holding deposits for a
certain period of time, such as 12 hours or a day, waiting for withdrawals to come in,
posting the withdrawals until the balance is below zero, posting their own overdraft
fee, and then posting deposits.

Here a customer faced a problem with BOA where he says “I have direct deposit and
have seen withdrawals post on the same day as the deposit and still incur fees. I
have incurred easily over $500 in fees in the past several years and just incurred a
fee of $180. They should also charge per day fees rather than per transaction fees.
BOA, they care nil about people, the profit motive consumes their entire decrepit
existences.
Hospitals

1. Cut Practices: Doctor mainly suggests patients to do unnecessary X-Rays Blood Test,
MRI, Scan because when they refer patient to some pathology or Centers they have
their certain percentage which they get out of amount which the patients pays.

2. Unnecessary Admission : Doctor sitting in clinic they sometimes tells patient to get
admitted to certain hospitals even if they have Viral Fever or mild problem, as they get
commission out of the amount which the patients cost to hospital.

Eg:

 Mr. Ganesh gets himself admitted to a particular hospital every year and gets his bill
settled through Medi-claim. He gives the doctor a certain share from the amount
received.

3. Incentives from pharmaceutical companies: Pharmaceutical companies pay huge

amount to doctors to write there drugs or medicine to patient for certain duration. The
MR who come to give doctors the details of the drugs give holiday tickets of 10days or
more of foreign countries so that they prescribe there drug or longer duration.
Sometime they go to the extent of giving Cars or certain expensive gifts so that doctors
prescribe there medicine. According to the Government of India Pharmaceutical
companies can give doctors gift maximum of Rs.5000 as token of appreciation but not
exceeding that.

4. Sex determination of child: According t the Government rule of sex determination of

child is banned but still it goes n doctors take huge amount to tell whether the child is
girl or boy.

5. Abortion: According to the Government rule abortion of child is banned but still it goes
and doctors take huge amount to abort the child
6. Un-indicated Surgeries: Doctors sometime just to earn suggest patient to go through
certain surgeries which is not at all required.

Eg:

 A woman was told to get operated & remove her uterus as she was facing some
problem in her lower abdomen consistently. At the time of medi-claim inquires were
made and it was then she came to know that the surgery was not required it was mere
infection.
 Dr. Shah (Head of Urology at Nanavati Hospital) ignored certain important facts in the
reports. He constantly forced a patient to get admitted and operated in Mallika Hospital
(Jogeshwari), which was owned by his wife.

7. Selling confidential information: Hospitals sells patient’s personal information (mobile

number, illness, etc) to Insurance companies.

8. Sterilization: in order to avoid Cross-infection, Equipments used in hospitals have to

sterilize. But hospitals ignore this and many times use same instruments on different
patients.

9. Calibration of testing machine: Hospitals are required to calibrate all equipments used
for pathological test to determine its accuracy in testing. But many hospitals forgo this
as it is expensive and time consuming.

10. Patient Rights: Patients are required to be counseled before and after their surgery.
Also, the situation has to be explained and consent is to be taken either from spouse,
children or parents before admitting or operating. This rule is also ignored.
HVAC (Heat Ventilation Air Conditioning) Industry

1. Consultants who design the systems for various malls, hospitals, commercial complexes
etc accept bribes from various vendors (Companies bidding in the tender) for approving
their specification in the tender.

2. Consultants also accept bribes in approving the particulars makes(which competitors to

be kept against them for bidding) of competitors from vendors

3. Negotiators(from the client/end users)indulge in favoring particular brand during

various meeting/negotiations

4. Vendors(Companies bidding in the tender)indulge third party to satisfy the need of

middle man responsible for helping in securing the job for them

5. Vendors(Companies bidding in the tender)change specification without telling the end

user to reduce the cost

6. End user/Client (mall, companies) ask for bribe from the contractor who is executing the
project.
Logistics
1. Giving false value of the goods imported or exported
Wrong value of the goods exported or imported is specified in the final documents
produced in order to save the import and export duty from the customs.

2. Submission of false documents

False documents are created and submitted in the customs department and also to the
logistics company for purpose of imports and exports

3. Bribing the customs officers

Customs officers are given bribe for clearance of goods and documents by companies.
Recruitment Consultancies

1. Poaching of candidates( placing a candidate in one company and then after 1 yr or so moving
the same candidate to some other client)

2. Consultancies lying to organizations that they source CV’s from their network or their own
alumni or website but the reality is that like every other consultancy they source CV’s from job
portals.

3. Sending irrelevant CV’s in order to meet the targets

4. Giving false or partial information to the candidate about the JD, package, profile, company etc.