Ex-bankers share allegations of shady sales
Parliamentarians listened Wednesday to allegations that workers at Canada’s big banks face pressure to hit unreachable sales goals, coax clients into raising their credit-card limits and offer mortgages beyond what customers can reasonably afford.
A committee of federal MPs was hearing testimony from ex-bank workers as it examines accusations of questionable — and even illegal — sales practices by some of the country’s largest financial institutions.
The committee launched the hearings following a number of CBC reports citing unnamed employees at some big banks who allege they were pressed to sell unnecessary products and services in order to increase revenues and meet lofty sales targets.
The report named all five of Canada’s major banks: RBC, BMO, TD, CIBC and Scotiabank.
“It is absolutely profit before anyone else — it certainly has nothing to do with servicing the clients, as far as I could tell,” witness Sally Watson, who worked for Scotiabank for 33 years, said when asked about the industry’s culture.
“I think what’s shocking is how long this has been going on without anybody ever making a fuss about it — and I think it’s time a fuss was made.”
Some of Watson’s remarks focused on her time working for the bank a couple of decades ago. She also noted that her allegations on the more-recent culture at the bank came from second-hand accounts.
Watson also credited the scandal at Wells Fargo in the United States for encouraging Canadian employees to come forward with their own concerns about the industry. Wells Fargo was fined US$185 million last year after employees opened more than two million fraudulent accounts in their effort to hit imposing sales targets.
After its initial report, CBC said it received nearly 1,000 emails from employees of Canada’s five largest banks, alleging they felt pressure to “upsell, trick and even lie to customers” to hit targets that are constantly monitored.
All five banks have denied the claims, defending their practices and insisting that they put the needs of their clients first, regularly seek employee and customer feedback and address any inappropriate behaviour.
The committee is scheduled to hear from bank officials next week.
Scotiabank’s CEO told shareholders in April the reports were “largely unsubstantiated.”
Brian Porter said Scotiabank received eight complaints about sales practices last year — out of 400 million interactions between his bank’s clients and its employees.
“We take each of those eight very seriously,” Porter said.
“We investigate them. We’re proud of the bank. We’re proud of our employees. We’ve got very sound sales practices. We monitor and adjust them
where we think it’s necessary.”
As an employee, Watson said she was informed and received training many times in relation to strict codes of conduct at the bank for client confidentiality, money-laundering prevention and workplace discrimination.
But she insisted she didn’t recall ever hearing anything about a code of conduct on how products should be sold.
Employees have felt squeezed for decades to hit sales performance targets, and are told that failing to do so could eventually cost them their jobs, she alleged.
“People literally dread getting up in the morning because of the horrible things they know they’re going to have to do when they get to work,” she said.
“They’re going to have to sell somebody a mortgage they can’t afford, they’re going to have to let somebody buy a more-expensive car than they can afford.”