OTTAWA – Canada’s financial consumer watchdog said on Wednesday it was launching a review of business practices among the country’s major banks following reports citing unnamed employees who alleged that the lenders were selling services without the consent of their customers.
Lucie Tedesco, commissioner of the Financial Consumer Agency of Canada, said she is concerned by the allegations 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 broadcaster 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.
CBC reported that the banks said they act in the best interest of their clients and that employees are expected to follow codes of conduct.
The financials sector was the only decliner on the Toronto Stock Exchange in early trading Wednesday, down by 0.17 per cent. Four out of the five major Canadian banks were in the negative.