Hidden cameras capture bank employees misleading customers, pushing products that help sales targets
Critic says finance minister must do much more to protect consumers
Michelle Jeraline says she's so stressed out by the pressure to sell customers products at TD Bank, it's affected her health.
The TD employee says she's usually not acting in the best interest of her clients — she's trying to sell them products that will help her meet sales targets and keep her from being fired.
"It's weighing on me," she said. "And it doesn't feel good."
CBC is not using her real name and has agreed to conceal her identity, because she fears losing her job. And she's not alone.
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Marketplace has spoken confidentially to current and former bank employees from all the big banks: TD, RBC, BMO, Scotiabank and CIBC. CBC is concealing their identities because they fear professional repercussions. All expressed similar concerns about enormous sales pressure they say leads to potentially costly or otherwise dangerous financial products being pushed on customers.
"I had to mislead customers into getting products that they didn't need, to reach my sales target," said a recent BMO employee.
"It's not a customer service … environment," a former Scotiabank employee said. "We're there to sell — and make money for the bank."
'You were scared to lose your job'
Employees at all the banks Marketplace spoke with described weekly — often daily — meetings with managers, aimed at getting employees to push more products on customers.
Some branches circulate regular emails, too, they said, listing employee names and how many products and services each person has sold.
"If you're on the bottom … you were scared to lose your job," said the former BMO employee.
The bank employees told Marketplace the pressure to push products and services is especially egregious during these tough financial times, when inflation is up, interest rates are high and Canadians are feeling financially stressed.
To test the sales culture, Marketplace took hidden cameras to teller wickets and into the offices of financial advisors at the big five banks.
We were pitched everything from pricey credit cards to lines of credit, given poor advice about debt and misinformation about mutual funds. Hidden cameras also repeatedly caught bank employees breaking the law, according to consumer advocate Duff Conacher.
"What you describe is rampant violation," said Conacher, co-founder of Democracy Watch, referring to the Bank Act, which governs the behaviour of Canadian financial institutions.
None of the banks agreed to an on-camera interview request.
Previous investigation examined sales pressure
In a statement from the Canadian Bankers Association, a spokesperson said, "The examples described do not reflect the experience millions of Canadians have every day with employees at Canada's banks."
CBC has previously examined retail sales pressure inside the big banks. CBC's Go Public team began investigating in 2017, after three TD Bank employees spoke out about sales targets they considered unethical and harmful to customers.
Over the next few months, more than 3,000 current and former employees from all the big banks contacted CBC to speak out about sales pressure, resulting in an investigation by the Financial Consumer Agency of Canada (FCAC), the banking regulator.
The FCAC issued a report in 2018 that found a focus on sales targets was increasing the risk of banks placing sales ahead of the interests of customers.
Bank employees tell CBC that in the wake of that investigation, sales targets generally dropped.
But now those targets are back up, they tell Marketplace, at a time when Canadians are feeling the financial squeeze.
Employee made secret recordings
"I have had an increase of clients … upset, having to take money out of their children's RESPs to pay their bills," said TD employee Jeraline. "If they need to take money out, we have to do what we can to stop it."
She says she became so distraught about the sales culture, she started making secret recordings of "coaching sessions" with her managers, which she shared with Marketplace.
In one recording, a manager tells Jeraline that in order to make more sales, she should remember that she does not work in customer service.
"We are investment advisors," he says. "You have to have a bit of aggression."
Unlike registered financial advisers, financial advisors (spelled with an "o") at banks have no fiduciary requirement to their customers.
In another recording, a manager tells Jeraline she's being too nice to customers.
"You think of them a lot," says the manager. "It kind of backfires for you, in meeting your [sales] goal."
A TD Bank spokesperson said in a statement that the recorded conversations are "completely unacceptable" and go against the bank's code of conduct, performance policies and training.
Debt products pushed on hidden camera
To test what products might get pitched at the teller wicket, Marketplace sent colleagues wearing hidden cameras into two branches of each of the big five banks in Toronto and Vancouver.
When tellers input a customer's information, specific "opportunities" — products and services — pop up on the screen, bank insiders tell Marketplace.
For instance, if a customer had a no-fee credit card, the screen would advise tellers to try to upgrade the card to one with annual fees and provide language to help the sale.
"It would show a script on the bottom saying, 'The first year is free.' Something like that," said the former BMO employee.
At RBC, our tester was offered a new credit card and told it was "cool" he could get an $8,000 increase to his credit card limit.
A TD teller said our tester had been "such a great client" that she, too, qualified for a new credit card — no income check required.
Marketplace showed excerpts of our hidden camera findings to certified financial planner Sandi Martin, who used to work for a big bank, but left over a decade ago because she couldn't stomach the sales environment.
She says the banks are the big winners when someone signs up for a credit card — they've got high interest rates.
"The ideal situation is for a credit card to be given to somebody who then keeps a balance on it and can't pay it off," said Martin.
At BMO, our tester was pitched an upgrade to a more expensive chequing account. The teller explained that there was no cost if our tester maintained a $6,000 balance, but didn't mention that if the account ever dipped below $6,000, there would be a $30 monthly fee.
The teller said the premium account included an upgrade to a credit card with fees, but those fees would be waived. "It's like there's no cost," he said.
At a different BMO branch, a teller pitched a $25,000 line of credit and claimed it was a special deal. "It's not all clients will have this kind of offer," said the teller.
But Martin says being pitched an unsolicited line of credit should not be seen as some sort of special deal.
"This, of course, is spam," she said, noting the customer wasn't asking for anything "but somehow they're getting a financial product … that they'll pay for. And somehow they feel like they're being done a favour."
Martin pointed out that once people have access to credit — such as a line of credit or a credit card — they are likely to access it, which can lead to debt that's hard to pay off.
Advisors don't recommend paying off credit card
In a second test, Marketplace sent a colleague wearing hidden cameras to meet with financial advisors at the big five banks.
She posed as a customer with a $50,000 inheritance coming soon and wanted financial advice. If asked, she said she also had a $350,000 mortgage and $17,000 in credit card debt.
None of the advisors asked about existing debt, instead recommending that our tester invest the full $50,000 in products like GICs and mutual funds, which help bank employees hit their sales targets.
When our tester raised the credit card debt herself, only BMO and CIBC clearly recommended that she use part of the supposed inheritance to pay it off in full.
The advisor at Scotiabank suggested our tester only pay off "a portion" of the credit card debt, saving the rest of the inheritance to buy mutual funds.
The TD advisor first suggested our tester only make the minimum payment on the credit card debt, explaining that this would protect her credit score.
She later suggested "part" of the credit card debt could be paid, leaving the rest of the inheritance for investments.
At RBC, the advisor first pitched opening a line of credit — which would incur monthly interest fees — to pay off the debt. She then suggested just paying some of the credit card debt, saving the rest of the inheritance for mutual funds.
The test results don't surprise a former Scotiabank senior financial advisor, who told Marketplace he wasn't encouraged to help clients pay off debt.
"I don't get any [sales] points for that," he said.
'They're getting illegal advice'
Not advising a customer to fully pay off high-interest debt is a violation of a section of the Bank Act that says advice given to customers must be "appropriate," says consumer advocate Conacher.
"The number one advice that any good financial adviser will give you is pay down your highest interest debt first. And the advice was the opposite," he said.
"They're not only getting bad advice, they're getting illegal advice."
Marketplace also wanted to hear what advisors would say about the fees associated with mutual funds.
During the five visits to the banks, advisors at BMO, Scotia and TD incorrectly said the mutual fund fees are only charged on the profit the investment earns, not the entire lump sum. The CIBC advisor wasn't clear about the fees.
At RBC, the advisor correctly told the tester that if she wanted to invest her inheritance in mutual funds, a fee applied to the entire inheritance and any profit, but said the fees were nothing to worry about.
In fact, Martin, the financial planner, confirmed that a typical mutual fund fee of 2.5 per cent will reduce the potential value of a portfolio by almost half over 25 years.
"People are being taken advantage of," said Martin. "If anybody ever looks at, 'Why do the banks make so much money?' In part, it's because they're extracting it from everyday people who just want to save for their retirement."
All that mutual fund fee misinformation is also breaking the law, according to Conacher, who says a section of the Bank Act says employees must not "take advantage" of customers.
"If you're giving them misinformation, you've taken advantage of them because the bank is benefiting," he said.
None of the five banks responded to claims their employees had broken the law.
The FCAC declined an interview request, instead sending a statement that said it has had "concerns with banks' sales practices and takes the matter very seriously."
It also said that under new legislation that came into effect in 2018, banks have an obligation to offer products or services that are "appropriate" for consumers and are not allowed to provide "false or misleading information."
More bank inspections needed
Conacher called the FCAC a toothless watchdog. He said that in order for it to be effective, it needs to do regular, unannounced inspections of the banks, and when it catches violations, it should make the penalties high enough to eliminate any profit a bank made from violating the law.
"Unfortunately, the agency has done none of those things in the last 20 years," said Conacher.
He points out that the FCAC has issued less than $20 million in fines over 20 years, whereas regulators in the U.S. and U.K. have issued billions in fines in just 10 years.
"It's not showing any interest in protecting consumers," said Conacher. "It's showing much more interest in protecting the banks from accountability."
The federal finance minister oversees the FCAC, but Chrystia Freeland declined a request for an on-camera interview and avoided questions when Marketplace caught up with her at a recent Toronto event.
In a statement, a spokesperson from Freeland's office wrote that the government has "zero tolerance" for banks offering misleading or inappropriate financial advice, and has introduced new consumer protections in the Bank Act.
Those protections were in place during Marketplace's hidden camera test.
Jeraline, the TD employee, says she doesn't see the sales culture at the bank changing anytime soon, but can't quit because she has bills to pay.
"I feel bad, but I mostly feel disappointed in the company," she said. "I'm sorry we're not able to provide you with adequate financial advice."
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