Bank watchdog saw surge in complaints about dubious credit card applications months ago

One of Canada's top consumers watchdogs says it was planning on reviewing sales practices at Canadian banks since January, when it saw a surge in complaints from customers about being signed up for credit cards that they hadn't asked for.

'We are on top of this,' FCAC says of outrage over pushy sales tactics

Canada's top consumer watchdog said it was planning to probe sales practices at the banks long before the CBC's reporting this week. (Adrien Veczan/Canadian Press)

One of Canada's top consumer watchdogs says it is moving up its plans to review sales practices at Canadian banks, following a surge in complaints from customers about being signed up for credit cards that they hadn't asked for.

Brigitte Goulard, the deputy commissioner for the Financial Consumer Agency of Canada (FCAC), told CBC News on Wednesday that it regularly reviews Canada's financial services industry as part of its mandate to raise consumer awareness and ensure lenders are adhering to all laws and regulations in the sector.

The agency was planning on making sales practices at banks the focus of this year's review anyway, she said, even before CBC News published multiple accounts of dubious sales practices at many lenders by over-worked employees, who admit to signing up people for products without their knowledge in order to hit unreasonable sales targets.

Amid overwhelming public response to the stories, Goulard said the agency decided to move up its investigation and make it public. 

"We are on top of this issue and considering seriously the allegations we are seeing in the media," she told CBC's The National.

Brigitte Goulard, the deputy commissioner for the FCAC, says if the regulator's investigation uncovers any violations at the bid banks, they could be subject to a fine of up to $500,000 2:40

Goulard said FCAC saw a surge in complaints in January from consumers who were upset that their banks had allegedly signed them up for various credit cards without them having applied for them.

"We immediately advised the banks that we expected them to comply with the legislation and obtain the expressed consent from their consumers before providing them with credit cards," Goulard said.

"We are currently following up with the banks to make sure that they are actually doing what we expecting of them with respect to credit cards."

But the regulator's review won't just be limited to cards. FCAC also wants more information on sales practices in general, Goulard said.

"We will also be looking at, for example, the compensation they provide to sales staff to make sure it's not leading or promoting unsavoury sales practices," Goulard said.

The regulator has various punitive tools at its disposal, including the ability to fine individuals up to $50,000 and companies up to $500,000 if they are found to have violated any bank rules. Naming and shaming guilty banks is also at their disposal.

Script for irate customers

The probe comes as the bank at the centre of the storm is working to address the fallout.

Last Friday, on the day CBC published its second of several stories in the series, TD Bank circulated to its staff a script to use with customers who may be upset with the bank's portrayal in the media.

If customers ask if staff have sales targets, employees were urged to reply, "I do, but more importantly I have the motivation to help you by providing outstanding service and advice," the script reads. "I will only truly succeed by doing the right thing for my customers."

If customers ask if employees are merely trying to sell them something, the following reply is suggested: "My aim is to know you, understand your needs, be proactive and give you good advice."

When asked for comment by CBC News, a spokesperson with the bank said there's "Nothing exceptional or controversial" about the memo.

"We regularly prepare support material for employees so they can answer questions from customers," the bank said. "As you can see answers are quite straightforward that, yes, we have sales ‎goals but we're here to help customers‎."


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