BIG BANKS DEFEND ‘SOUND’ BUSINESS PRACTICES.

‘Not in business to push products’

The heads of two of Canada’s biggest banks defended their organizations’ sales practices to shareholders on Tuesday, with the Bank of Nova Scotia’s chief executive calling allegations of aggressive tactics at some banks “largely unsubstantiated.”

Brian Porter, president and chief executive officer of Scotiabank, said his organization has “very sound sales practices,” in his first public comments since CBC News published an initial story quoting employees of Toronto-Dominion Bank who felt pressured to upsell to meet difficult sales targets.

“We monitor and adjust ( sales practices) where we think it’s necessary.... These claims the CBC is making are largely unsubstantiated,” he said in response to a question from a shareholder at Scotiabank’s annual meeting in Toronto on Tuesday.

Meanwhile, Bank of Montreal’s chief executive Bill Downe told shareholders at its annual general meeting in Toronto on Tuesday that he was confident that his employees “know we’re not in business to push products” and that the organization has fostered a culture where staff can “voice concerns without fear.”

The chief executives’ comments come as the Canadian banking industry has come under scrutiny after CBC News reports quoted unnamed current and former TD employees, some of whom claimed to have raised credit and overdraft limits without customer consent in order to reach difficult sales targets.

A subsequent CBC News story also cited nearly 1,000 emails and calls from employees of all the Big Five banks, describing feeling pushed to meet unrealistic sales goals or risk losing their jobs. These allegations prompted the Financial Consumer Agency of Canada to move up its review of the financial sector to April.

Last week, TD’s chief executive, Bharat Masrani, told shareholders at its annual general meeting that he doesn’t believe there is a “widespread problem” with aggressive sales practices at the bank. Still, the lender has brought in an unnamed professional services firm to assist with a review of its processes “to make sure we really test ourselves,” Masrani said.

TD has received “a few hundred complaints related to their sales practices that were escalated beyond the initial channel” and of those, fewer than 100 had compliance concerns, and these were investigated and addressed, Masrani added.

A receiver’s report, filed with the Court of Queen’s Bench of Alberta on March 30, claims Lexin’s documents were recovered in various unusual places.

“The receiver notes that t here are entire rooms, i ncluding t he women’s washroom, containing an estimated 1,000+ banker’s boxes and filing cabinets, presumably c ontaining Lexin records,” the report states.

The report also says the receiver learned Lexin had records stored in a storage locker in a southeast Calgary neighbourhood three days before the lease on the storage locker was set to expire. The receiver has since t aken possession of t he locker.

The Alberta Energy Regulator also has Lexin records it seized f rom offices in downtown Calgary “located either in the garbage or strewn about on shelves,” and six racks of disassembled computer servers.

The r eport noted t he documents are currently being stored in garbage bags and Lexin’s legal team has asserted lawyer- client privilege claims on the items recovered from the office.

It also says the receiver is visiting other Lexin field offices to locate any additional files.