Banks Behaving Badly

The media has been all abuzz lately about the Big-5 Banks and the shady practices they are using to dupe unsuspecting customers. I was approached twice by CBC for an interview which I declined both times. The reason? First of all, the mere thought of appearing on live national TV gives me a full-blown panic attack. And, secondly, I don’t really agree with the media’s strong irascible outrage the GoPublic admissions have provoked.

Related: Banking on a high pressure sales culture

This is my opinion based on being a former bank employee and a current customer.

A little bit of history

When I first started working in the banking industry, the business was only transactional. Customers came into the bank to cash their cheques, withdraw cash, pay some bills. Maybe they wanted to buy a GIC or take out a loan. There was limited choice available at the time. Customers went into the bank for a reason and came back out with what they wanted – not unlike going to Wal-Mart for a pack of socks or Safeway for a loaf of bread.

In time, more and more products and services were offered. Bank staff who previously were customer service oriented now had to learn how to inform their customers about these new products and, yes, sell them. Thus, the sales culture was born.

Related: 5 ways to avoid monthly bank fees

This didn’t initially bother me. Employees took courses on sales techniques, negotiating skills, addressing features and benefits of products, and the occasional motivational seminars at least took us out of the office for the afternoon.

I was good at sales – always in the top three of our sales board. But, I did it the old-fashioned way. I knew the bank’s products inside and out and knew how to match them to my clients. I had an excellent network of realtors, brokers and the smaller car dealerships in my area. I could always meet my sales goals.

Then came the bank’s “flavour of the month” products that were not necessarily appropriate to all customers but we were expected to aggressively promote them. I am not an aggressive sales person – I like more of a “these are the features and this is how it will benefit you” strategy. This was not the only reason I resigned, but it certainly was an important one.

Canada's big five banks behaving badly

The pressure of sales goals

I am sure that the banks are not encouraging unethical and illegal practices from their employees, although I wouldn’t be surprised if they were turning a blind eye.

In my opinion, the staff that lie to customers, or increase credit limits and add products without the customers’ approval or even knowledge to make their sales goals should be fired immediately.

Those who are stressed or taking extended sick leaves are not in the right job.

Am I being hard on them? Maybe. But aggressive sales practises are the norm in many other businesses. You need to have the right personality to do well in that type of culture. It wasn’t for me and I knew it.

How can customers protect themselves?

When I had a new customer, I input all their information and a screen would pop up stating what amount of credit was approved for them.

The conversation would go like this:

Me: Mr. Adams, you are automatically approved for an additional $20,000 of credit. You can take it as a line of credit, or split the amount and use part for a new credit card. A line of credit won’t cost you anything until you use it. It could come in handy with this new home purchase to cover any unexpected expenses you may have, or if you perhaps need to buy new drapes or upgrade your appliances.

Mr. Adams: Sure, that would be great!

I can’t think of one person who declined my kind offer.

So, what does this mean? If you are offered a product that you don’t want or need, channel Nancy Reagan and just say “No.” If you have some interest but are not quite sure, ask for more information so you can make an informed decision. Don’t blindly accept products being pitched to you.

Related: Bank slogans and taglines, translated

If your loved one is elderly or a new immigrant unfamiliar with Canadian banking, and you are concerned about them being forced to agree to a product by an employee using fast-talking sales practises, encourage them to bring information home so a trusted person can look it over.

Make it a practise to look over your statement monthly. While many charges will be waived, technically you only have 30 days to make a complaint.

If the bank employee refuses to negotiate mortgage or GIC rates (there is a decrease in sales “points” for every ¼% reduction or increase), threaten to take your business elsewhere.

Final thoughts

Bank bashing is a common Canadian activity, especially when we see the humongous profits they regularly rake in (which are not passed on to front-line staff, by the way).

The odds are that many of you are shareholders and have a vested interest in the Banks doing well.

In the 2008-2009 financial crisis, when US banks almost imploded, Canadian banks were touted as being the most secure in the world.

However, with the recent media exposés about employee conduct, banks will have to work double-time to regain their customers’ trust.

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  1. Dan on March 16, 2017 at 8:49 pm

    Complaining about banks, the federal government and cell phone companies is the Canadian way. But banks do seem to be getting worse over time, the last time I was in the bank to ask a simple question about my account they proceeded to offer me a heloc for $150k

    • Tamir on March 17, 2017 at 6:44 am

      $150k HELOC?
      Whatever you are doing, sounds like you are doing it right.

  2. Michael Strong on March 17, 2017 at 5:21 am

    Once again, SPOT ON!. Thank you for the tips.

  3. Jane on March 17, 2017 at 5:59 am

    I think that your comments are fair and balanced. I do worry about vulnerable people being oversold products by banks and others. But, being informed about what you need and want from banks, and being able to say NO is your best defence!

  4. Pete on March 17, 2017 at 6:55 am

    Recently went to my bank to get extra credit to finance a lane home.
    Already have an unused HELOC but rather then get that limit increased involving legal fees, I got a small unsecured loan based on my current assets and net worth.
    That plus the HELOC should just about cover what is needed for the family project.
    All should be paid off in 4yrs 10months
    The loan officer told me that with my net worth including home and assets qualified me for free expert investment advice as I had a self directed rsp.
    A little pressure , but after a little time I went to see the investment “advisor” who gave me one of the simple investor type quizzes that give a very rough idea of your risk handling characteristics.
    Then I was informed to participate, I would have to sell all my holdings and the advisor would then buy and rebalance risk appropriate bank mutual funds, all the while charging me a yearly fee.
    I went home and talked to my wife who said that I had looked after my investments ok for all these years and that I have avoided mutual funds so why start paying someone to do it now?
    I , of course, took my wife’s advice.

    • FritoPaws on March 17, 2017 at 9:15 am

      That’s crazy! That probably would have exposed you to an unexpected and unnecessary tax bill on capital gains on the sales. Too much self interest there. Smart wife!

      • FritoPaws on March 17, 2017 at 9:19 am

        Always thought of the possibility of getting a part time job as a teller after retiring from an accounting career as a low stress transition. Guess that’s off the table now!

      • Scoob on March 20, 2017 at 10:10 am

        Frito if you read the comments, Pete said he had a self directed RSP, there would be no capital gains if this were the case. Also there are specific advisors that manage a portfolio with mutual funds and ones that will do so under a stock portfolio mix. And despite what you might think there are people who self manage just fine and those that want advice because they don’t have time or expertise to do it themselves. There’s always a choice.

  5. G Fawley on March 17, 2017 at 8:54 am

    If you don’t really agree with the media’s strong outrage that the Go Public article has provoked, why not voice your informed opinion via CBC in order to give the public a more balanced view? I think that the media will blow things out of proportion just for a story. Meanwhile the public needs to take personal responsibility for their own affairs (much of what the banks are being misaligned for).

    • boomer on March 17, 2017 at 11:00 am

      @G Fawley: The first request was to advise how bank customers can avoid being cheated. Cheated? Really? The media doesn’t want a balanced view, they want public outrage, and, considering the bank stock plummeted more than 5.5%, they got it.

  6. KC on March 17, 2017 at 8:57 am

    My favourite has to be when I went into a bank to activate my credit card due to fraud on my old card and they needed both pieces of ID. They said, oh, we can offer you a $30,000 limit on your card (I only had $1,000 at the time). Naturally, I was stunned and only requested a small increase to $5,000.

    She said, well why don’t you take it? I said, where were you when I needed you a year ago where I had to fight tooth and nail just to get a $500 credit card? Just give me $5,000 and we’ll call it a day. Okay she says but she still went ahead and put my limit to $30,000. Cue me in signing up for another card with a $6,000 limit with another bank then I went into the previous bank where ironically, I was face to face with her again and told her to cancel my card as she breached my trust. She lost her job that day. I later found out that people get fired if they lose a customer. Just wow…

    • fbgcai on March 17, 2017 at 9:15 am

      good policy – which bank was that?

      • KC on March 17, 2017 at 10:05 am


        • Ryan on March 18, 2017 at 8:53 am

          Is it possible she lost her job because of the breach of policy vs. losing a customer? How would a bank track which employee lost a customer? Logic is unsound.

  7. fbgcai on March 17, 2017 at 9:15 am

    Sales – the bane of our society especially the high pressure variety.
    Yes a necessary evil but I like Rob’s description of stating facts and benefits and then accepting the customer’s decision as the better method.
    My initial take on any offer is “let me think about it” – if told I need to make the decision with a time limit (ie. right now) the answer will always be “NO” or more politely “No thank you” – further discussion will be very rudely cut off as in “what part of NO do you not understand” and/or involvement of supervisors or hanging up.
    Read somewhere – “the deal of the century happens every other day/week” – I use that as a leitmotif :).

  8. Kathy Your Net Worth Manager on March 17, 2017 at 9:25 am

    Honestly why are people surprised? Car dealers sell cars, cell phone shops sell cell phones, the lady in the dress shop wont tell you your bum looks fat in that dont buy it! Banks sell products to you a thirdparty. My advice is be the shareholder they are making money for not the chump they are making it on. Listen to offers in case it is useful and say no thankyou. Be polite …..imagine the yucky job these people have. Dont carry debt , dont buy their investment products. You would be better off with with 3 index funds tracking the TSX, SP500 and the DEX bond Universe at one tenth of the cost. Least you will be in charge and make the market .
    Unbundle products and advice. Pay for advice and go find your own products

    • fbgcai on March 17, 2017 at 9:32 am

      good advice 🙂 where do I send the cheque? 🙂 not

  9. Mr M on March 17, 2017 at 12:56 pm

    I have definitely noticed a bigger sales push and decrease in customer service at TD, over the years. I get it, they have commission incentives to sell new products. But they should really consider having customer service incentives to also retain customer business. Or how about just offering better products?

    I went in to talk to an “advisor” about transferring my RSP over into an e-Series account and it was so obvious that she was working on commissions – was condescending and tried to talk me into buying expensive mutual funds instead. No thanks, took my RSP to Wealthsimple instead.

  10. Enoch on March 17, 2017 at 1:52 pm

    Great article, Marie! I do agree with your decision to decline the media interviews…no need to fuel any hysteria, which is the angle CBC is going to lend to your opinions. That being said, it’s high time Canadian banks start to clean house. They definitely aren’t looking good right now.

  11. Ian on March 17, 2017 at 4:31 pm

    I am a customer of TD and have chequing and savings accounts gics mutual funds and direct brokerage accounts with them. I have not had any trouble with aggressive sales practices at all. They sometimes suggest new products which can be useful. When I decline their offers they have never harassed me. I would not be bothered by them bumping up my credit limit if they told me because I have never come close to using what I have.

    • fbgcai on March 17, 2017 at 10:03 pm

      I can second Ian’s comments – I’ve never found TD to be pushy or harassing – in fact the last call from them suggested a change to a lower cost class of mutual fund that I hold ie. lowering their revenue – surprise!

      ps. apologies to Marie – I thought Rob had written this blog post

  12. SpeshulK on March 18, 2017 at 11:46 am

    We should be able to trust our financial institutions to deal with us fairly and upfront. Giving us the choice to accept or decline any new offer. Its the pressure sales that anger me. I never answer one evening call from the TD bank. Their sales are unrelenting. They won’t take NO for an answer so I just HANG UP! They try to guilt or scare you into CHOOSING the latest offer. I dont fall for it but many elderly LIFE LONG clients do. That is reprehensible! Its less about customer service and way more about sales and their bottom line. Its bully tactics. One thing this has really taught me. Never answer their calls and watch your statements like a hungry hawk!!! Trust nobody with your hard earned money! Banks better get it together. They are shady!

  13. R on March 19, 2017 at 6:29 am

    No apologetics for the banks and their unrelenting sales revenue goals, please. And no complaints about CBC whipping up hysteria, either. Remember, three veteran bank employees came forward to CBC; CBC didn’t go looking for this story. And once the story went out, CBC was deluged with corroborating correspondence from employees of all the other big banks. It has been one of CBC’s most popular stories. Consider that many people have mortgages with the big banks worth 100s of thousands of dollars, or if they are at a stage where they are mortgage-free, they may have their entire life savings in bank-issued mutual funds and GICs, it is far past time that the banks are held by regulation to a fiduciary duty or best interest standard. Caveat emptor is wrong for the consumer of financial services and it is unethical for the financial institutions themselves. (From an employee of a bank)

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