Consumer agency launches review of banks

Canada’s financial consumer watchdog is launching a review of business practices among the major banks following reports citing unnamed employees who alleged the lenders were signing customers up for services without their consent.

Lucie Tedesco, commissioner of the Financial Consumer Agency of Canada, said Wednesday she is concerned by the accusations and issued a statement reminding the lenders of their obligations to obtain prior consent before increasing credit limits and providing clients with new products.

“Financial institutions’ compliance with these rules is non-discretionary and the message must be disseminated from the boards of directors on down to customer-facing staff,” Tedesco said.

“Through the industry review we are announcing today, we will examine financial institutions’ business practices in relation to express consent and disclosure, including the identification of any factors that may be contributing to non-compliance.”

The review, which is set to begin next month, comes after the CBC reported that some employees from Canada’s five biggest banks alleged that they felt pressured to upsell, trick and even lie to customers to meet sales targets that were unrealistic.

TD, the focus of early stories about the issue, has said it doesn’t believe the reports accurately reflect the bank’s workplace.

Scotiabank, Royal Bank, CIBC and the Bank of Montreal said in emailed statements that they put clients’ needs first, they regularly seek feedback from their employees and customers, and work to resolve any issues.