Bank employees angry regulator's report on sales tactics weakened after banks and government review drafts
Consumer organization says internal documents show public inquiry needed
Several bank employees are speaking out, angered by recent revelations that a report on banking sales tactics was weakened after the regulator shared a draft copy with the banks and federal government.
They contacted Go Public to reveal why they think upselling wasn't widely detected during a lengthy review of misleading sales tactics by the regulator — slamming the bank review as inaccurate, inappropriate and a PR exercise.
The employees provided internal documents disclosing aggressive upselling they said isn't obvious and said they were frustrated by a recent Go Public story that showed a report released by the Financial Consumer Agency of Canada last year had key consumer protections eliminated after early drafts were shared with the federal Finance Department and the big banks.
"When I saw the regulator gave the report to the banks, I couldn't believe it," a CIBC call centre employee wrote to Go Public. "I had to reach out to you."
CBC has confirmed the identity of bank employees in this story, but is not revealing them to protect their employment.
The regulator told Go Public it gave banks a draft report so they could identify factual errors. The review was conducted in 2017 and culminated in a report released on March 20, 2018.
The FCAC's handling of its bank review is grounds for a public inquiry into the regulator and Canada's financial services, says the Small Investor Protection Association (SIPA), a consumer advocacy organization.
"It's proof that the Department of Finance is complicit with the FCAC and is deceiving the public," SIPA president Stan Buell told Go Public.
'Exercise in public relations'
The CIBC call centre employee says she was one of the people interviewed by the FCAC as part of its review.
The regulator interviewed some 200 bank employees at various branches of BMO, CIBC, RBC, TD, Scotia and National Bank as well as 400 more employees — some of whom, worked at banking call centres.
"That whole interview was an exercise in public relations," she says.
She says during the interview, she wasn't transparent about the pressure to meet sales targets, because she worried the process wasn't confidential.
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"Did I tell them we were pushing sales hard? No way," she says. "How did I know that wouldn't get back to someone?"
She says she has sold things to help the bank's bottom line and meet sales targets, but has made it seem as though it is in the best interest of the client. "At every telephone banking level, we are trying to sell to the client."
She says she had to vent, after learning the regulator's report was weakened, after early versions were sent to banks and government.
"It just made me really angry, reading what went on behind the scenes," she says.
In an email to Go Public, CIBC's director of public affairs Trish Tervit says the bank "supplied complete org charts" to the FCAC.
"The bank did not select which employees were interviewed as part of the FCAC's industry-wide review," wrote Tervit. "Putting clients at the centre of all we do is our priority every day. We have a strong, client-focused culture and we continuously review our business to ensure we do what's right for our clients."
How upselling goes undetected
A Scotiabank financial adviser says he thought it was inappropriate for the FCAC to let banks see the draft report.
"The banks shouldn't have had any say in it, in any way," he says. "That's shocking to me."
He says his sales targets have sharply increased since last November. He says employees are upselling customers simply to meet sales targets, but that much of that harm would be impossible for the regulator to detect.
He provided a screenshot of an internal website, showing that the higher an interest rate an employee quotes a customer on a mortgage, the more sales units they earn towards their target.
"They [customers] don't know they could've got a lower mortgage rate," says the financial adviser. "I don't know how upselling would ever be tracked."
Another example of upselling he said the regulator couldn't detect is the way employees are encouraged to move clients away from investing in GICs and steer them into mutual funds, which provide guaranteed annual fees for the bank.
To meet sales targets, he says he pushes mutual funds because he gets double the amount of credit.
"That can be harmful to customers," he says, "because a mutual fund might not make sense."
In an email to Go Public, Scotiabank director of Canadian banking communications Patricia Hsiung wrote, "Any reports that Scotiabank has set aggressive sales targets are inaccurate and misleading. Scotiabank remains committed to delivering an exceptional, transparent and trustworthy experience for our customers that prioritizes our relationships over products."
She also wrote that the bank considers "customer feedback from more than one million surveys yearly" and is making, "great strides in driving towards industry leadership in overall customer satisfaction."
FCAC report 'not accurate'
Another Scotiabank financial adviser working in a different city also contacted Go Public to say he was disturbed to see the regulator's report was weakened after it went to government and the banks, and that the regulator's claim that it did not find that bank customers were widely harmed — is not accurate.
He provided documents showing his sales targets had significantly increased as of last fall.
"The pressure is enormous," he says. "We're lying to our clients. Upselling all the time. You don't want to do it, but if you don't, you'll lose your job."
He says the regulator wouldn't know his manager tells him to gloss over the fees attached to a mutual fund.
"People will back out if they know there's risk involved, or fees," he says.
He says he also increases credit card limits because he's under pressure to hit sales targets, but the FCAC wouldn't be able to tell that either, by looking at files.
"If they [bank customer] have an existing card with a $5,000 credit limit, I'll say, 'I see you're pre-approved for $10,000, let's attach that to your file,'" he says. "I don't ask the client if that's a good thing for them, in case they say no. I need to make points for my sales target."
Call for public inquiry
News that the banking regulator provided draft copies of its review into aggressive sales tactics to government and the banks has prompted renewed calls for a public inquiry into financial services and the FCAC from the Small Investor Protection Association.
"I really think the government needs to listen to the voices of the people, to understand what their needs are and the impact on their lives, due to the lack of investor protection," says Buell. "The FCAC should be providing that, but is not."
In a statement released earlier this week, Buell said an independent inquiry is necessary because "Canadians are entrusting their hard-earned money, savings and futures with what should be trusted institutions and individuals."
"There appears to be a far too cosy relationship between the banking industry, the FCAC and the Finance Department," says Buell.
Go Public asked Finance Minister Bill Morneau about claims that the report was weakened after he saw it. "Obviously, it's always important for us to take a look at how the banking sector is working," he says.
"And I'm confident the FCAC did a good job."
'People ... shouldn't trust what we say'
Regardless of whether or not a public inquiry is called, one of the Scotiabank financial advisers who reached out says he has a message for banks, and for bank customers.
"They [the banks] need to stop being so greedy and ripping people off," he says. "And when people go to the bank, they shouldn't trust what we say. We're under pressure to sell, but we can't tell you that."
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