Does profit trump ethics?
OUR EDITORIAL: WHAT WE THINK
Former bank employees told Parliamentarians about high-pressure sales tactics within Canada’s big banks during committee hearings Wednesday in Ottawa.
The committee of federal MPs is conducting hearings following a number of CBC reports in which employees at some major banks allege they were pressured to sell unnecessary products and services to clients in order to hit lofty company sales goals. The reports have prompted Parliament to look into the accusations of questionable — perhaps even illegal — sales practices by some of Canada’s major financial institutions.
One witness, a former bank employee who spent 33 years in the banking industry, told the hearing, “It is absolutely profit before anyone else — it certainly has nothing to do with servicing the clients, as far as I can tell.”
She credited last year’s Wells Fargo scandal in the U.S. — in which the company was fined because of more than two million fraudulent accounts created by employees in an effort to meet sales targets — with emboldening Canadian workers to come forward with their own concerns about the financial industry.
CBC said after its initial report, it received close to 1,000 emails from employees of the five major banks, alleging they felt pressured to “upsell” in order to hit sales targets.
All five of Canada’s big banks have denied the claims, and bank officials are scheduled to give their testimony to the Parliamentary committee next week.
High-pressure sales tactics are nothing new. It’s been happening as long as people have been trying to sell things to other people, and it likely occurs in just about any type of business field you could name, and from small shops to large corporations where shareholders put pressure on executives to produce a certain level of profit.
But consumers should be able to expect a reasonable degree of integrity in the marketplace, and that’s especially true in essential services such as banking. It’s a situation not unlike recent concerns about the airline industry and the way in which consumers are treated.
The Alberta government recently cracked down on the payday loan industry in an effort to better protect consumers from being taken advantage of by the lure of quick cash and winding up in severe financial straits. Similarly, trusting citizens can fall victim to sales practices that don’t have their best interests in mind, but instead are geared to reap more revenue for the company. It might not necessarily be illegal, but it’s certainly unethical.
If the Parliamentary committee finds firm evidence of questionable sales practices by the big banks, there might be little the government can do unless actual illegal tactics are involved. But perhaps just bringing the issue to light will empower consumers. “Buyer beware,” the old adage states, and an aware consumer is likely to be a wiser one.
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