Wed. Apr 24th, 2024

Beware of bank employees who poorly advise their customers

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Employees at all the banks Marketplace spoke with described meetings aimed at pushing employees to offer more products to customers.

Radio-Canada

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An investigation from the show Market Place on CBC caught several employees of large Canadian banks prioritizing their sales objectives to the detriment of their customers.

I had to deceive customers into buying products they didn't need in order to reach my sales goal, for example, a BMO employee recently told reporters on the show.

Faced with testimonies from employees of the five major Canadian banks (TD, RBC, BMO, Scotiabank and CIBC) highlighting internal pressures aimed at offering customers potentially expensive, even dangerous financial products, Market Place decided to go into the field with a hidden camera. Two branches of the five major banking institutions were tested in Toronto and Vancouver.

We've had it all: expensive credit cards, lines of credit, bad advice about debt, and misinformation about mutual funds.

A quote from Excerpt from x27;Market Place article

Hidden cameras have also repeatedly caught bank employees breaking the law, notes the rights defender consumer rights, Duff Conacher.

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Duff Conacher, co-founder of the organization Democracy Watch.

What you're describing is a widespread violation, said Conacher, co-founder of Democracy Watch. It refers to theBanking Act which governs the behavior of Canadian financial institutions.

Do not advise a client to fully repay high-interest debts constitutes a violation of an article of the Banking Act, mentions Mr. Conacher.

Moreover, fees related to possible investments in mutual funds were almost always minimized by financial advisors. Some even falsely claimed that the fee was only charged on profits.

People are being taken advantage of, says Sandi Martin, a certified financial planner. She worked for a large bank, but left over ten years ago because she couldn't stand the sales environment.

Open in full screen mode< p class="StyledImageCaptionLegend-sc-57496c44-2 sbxsP">Sandi Martin, Certified Financial Planner.

Martin points out that fees are typically 2.5% per year for mutual funds and that they reduce the potential value of the fund. a portfolio of almost half over 25 years.

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Neither bank accepted a request for an on-camera interview.

The examples described do not reflect the daily experience that millions of Canadians have with Canadian bank employees.

A quote from the Canadian Bankers Association

For its part, the Financial Consumer Agency of Canada (FCAC), the banking regulator, says it is concerned about the sales practices of banks and claims to take the situation very seriously.

The FCAC clarifies that under the law which came into force in 2018, banks have an obligation to offer appropriate products or services to consumers and are not allowed to provide false or misleading information .

But according to Duff Conacher the FCAC is the equivalent of a toothless watchdog. According to him, it should increase the number of unannounced inspections and impose much heavier sanctions in the event of violations.

He points out that the FCAC has imposed less than $20 million in fines over 20 years, while regulators in the US and UK -Uni have imposed fines worth billions of dollars in just 10 years.

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Finance Minister Chrystia Freeland. (File photo)

The federal finance minister oversees the FCAC, but Chrystia Freeland declined an interview request before the camera and avoided questions when Marketplace caught up with her at a recent event in Toronto.

In a statement, a A spokesperson for Freeland's office wrote that the government had zero tolerance for banks offering misleading or inappropriate financial advice, and that it had introduced new consumer protections in the Bank Act.

Based on an article by Eric Johnson, journalist for investigation at CBC.

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