[t
[Erica]
[TD insider] We're encouraged to push our targets over clients.
[Erica]
[Scotiabank insider] It's not a customer service
or advice-driven environment.
[Erica]
at what cost?
They're not only getting bad advice,
they're getting illegal advice.
[Erica]
[Charlsie] Minister Freeland, this is CBC
We're hoping to speak to you about a story we're doing
about sales pressure in the banks.
♪
-Hey, guys. -Hey, Erica.
[Erica]
And, of course, we're gonna have hidden cameras rolling.
Putting tellers to the test at Canada's big five banks.
-[man] -[teller]
[man]
[Erica]
to make a simple deposit.
-[Kimberly] -[teller]
[Erica]
of the big banks, who tell us there are targets to hit.
[BMO insider] It's a high-pressure sales environment.
[Scotiabank insider] We had high expectations for sales quotas.
[TD insider] We're encouraged to push our targets over clients.
[Erica]
about banks pushing products you don't need
or never asked for.
I'd explicitly told them that I didn't want
any sort of loan protector service that they offered me.
Kind of noticing that we had kinda high bank fees.
It was $9.95 a month for the bank account,
and then through his MasterCard,
we were seeing different numbers,
varying from, like, $30 a month
up to, like, $50 a month.
$95 a month for a useless insurance policy
has caused me quite a bit of grief.
[Erica]
financial decisions really matter,
and the big five made over $50 billion last year.
So, are the banks actually looking out for us
or more interested in making a sale?
To find out, we're going in to BMO,
CIBC,
RBC,
Scotiabank,
and TD.
Visiting two branches each in Toronto and Vancouver
with our hidden cameras rolling
to see for ourselves if we get pitched products.
[teller]
[man]
[teller]
[Erica]
an independent certified financial planner,
and a former bank employee.
What is the goal of the bank employee?
It's to sell the products on the shelf,
and to make you feel good about having purchased them.
[Erica] So it's just about sales?
Yeah.
[Erica]
But then...
[man] Okay.
[Erica]
[teller]
So, the harm is that you are treating a moment
where somebody assumes they're getting a service,
as an opportunity to slide in there with a sale.
And I think that's kind of gross.
[Erica] If people have access to credit,
how likely are they to use it?
You might not realize how much
this is a dangerous thing to have.
It can add up really fast.
[Erica]
But a different story at BMO.
After our tester deposits her cash,
she's pitched a chequing account.
[Erica]
if she doesn't maintain $6,000,
her account fees double.
[BMO insider] There was a lot of sales pressure
in every aspect of the bank.
[Erica]
this former BMO teller knows all too well.
[BMO insider] A lot of people can't keep that balance
above $6,000,
so they're eventually charged for the premium plan.
-The $30? -Yes.
I've seen it a lot.
[Erica]
and someone else is reading his words,
because he still works in the financial industry,
and fears speaking out will cost him his job.
[BMO insider] Every week they would release your results,
and display your name with what you sold.
Why do you think that email went out?
[BMO insider] To shame you.
You were scared to lose your job.
[Erica]
the sales credits BMO employees get
for selling things like chequing accounts,
credit cards, and lines of credit.
The more money the bank makes,
the more credits the employee earns.
I felt like I had to mislead customers
in getting products that they didn't need.
What toll did that take on you?
[BMO insider] It was a very unethical thing to do,
and I felt like I'm putting them in a worse position.
[Erica]
he says colleagues added products
to customers' accounts without their knowledge.
[BMO insider] Many times,
because they needed to meet their sales targets.
[Erica]
Sign up customers or face being fired.
[Erica]
with CBC's
employees at all the banks were under to sell.
Already there are calls to better regulate
financial titles.
[Erica]
just to hit targets, sometimes even breaking the law,
doing things like increasing credit card limits
without permission.
It's hard to trust them after seeing incidents like this.
[Erica]
At TD, as our tester is depositing her money...
[woman] Oh!
[teller]
So you qualify for a credit card,
you don't even need an income check.
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.
But of course the bank wants to sell people credit cards,
and of course the barrier to entry is going to be so low
it's in the floor.
[Erica]
But over at another BMO branch...
[Erica]
for a $25,000 line of credit.
[woman]
[teller]
A line of credit with a slightly lower interest rate
can really amplify
the small amounts of overspending
that add up over time,
and suddenly you have something
that's incredibly difficult to pay off.
[Erica]
Not surprising to this former BMO employee.
He recently quit when the pressure to sell
became too much.
I said, "I feel like this is wrong."
And what did she say, your manager?
She says, "Every bank does the same thing.
If we do it, at least we get the sales."
[Erica]
If you sold, you know, a half a million dollar mortgage,
it would be worth half a million points.
[Erica]
says he was pressured to sell, too.
We're concealing his identity,
and someone else is reading his words.
[Scotiabank insider] It's not a customer service
or advice-driven environment.
We're there to sell and make money for the bank.
[Erica]
So, Sandy, your head was literally in your hands.
Oh, it's so bad.
[Erica]
♪
Get more
Sign up for our weekly newsletter
at CBC.ca/Marketplace.
[Erica]
We're investigating the sales culture
inside Canada's big banks,
visiting branches to hear the sales pitch,
hidden cameras rolling.
[teller]
[Erica]
about the pressure to meet high sales targets.
[BMO insider] You have to sell something to that customer,
even though they don't need it.
[Erica]
at a time when costs are adding up.
-Are you feeling the pinch? -Absolutely.
Um, it's an extra, you know, $100 to $200 a week
that we're looking at for a family of four, so.
-At the grocery store. -Yeah, at the grocery stores.
My mortgage rates are constantly going up,
and for my husband and I,
it's just so hard for us to make those payments.
[TD insider] I've had quite a few clients cry and,
you know, tell me about their hardship.
[Erica]
what this TD employee is hearing more and more.
We're concealing her identity and using a different voice.
[TD insider] It feels awful.
I shouldn't have to think more about my target
than the client's well-being and their interests.
[Erica]
even as some clients say they have bills to pay.
I have had an increase of clients upset, you know,
having to take money out of their children's RESPs.
If they need to take money out,
we have to do what we can to sort of stop it.
So, to be clear,
do you feel you're under pressure to get customers
to make financial decisions
that may not be in their best interest?
[TD insider] 100%.
[Erica]
She secretly recorded a coaching session
with her manager about pushing customers.
Her words are read by someone else
to protect the insider's identity.
[TD manager 1]
[TD insider] I don't think it's backfiring.
I think I'm actually helping the customer.
It's upsetting because this is the corporation I work for,
and this is all driven by greed.
[Erica]
So, we're heading back inside the bank,
this time to test what kind of financial advice we get
from folks beyond the tellers...
Let's hook up this one to your button, Kim.
...those trusted financial advisors and planners.
There we go. It's now recording.
Helping us out, our colleague, Kimberly.
She's going undercover...
If they ask, you have some debt. Credit card debt.
-About $17,000. -Okay.
...telling advisors she wants to invest a $50,000 inheritance.
Not true, but we're testing the advice we get.
First up, what do the advisors tell us to do
about that credit card debt?
[Kimberly]
[Erica]
Invest the rest.
Bad advice, says certified financial planner Sandi Martin.
There is no way that you can make 19.99% on your investment.
It just won't happen.
Of course you should pay your credit card debt off.
[Scotiabank insider] The advisor does not get paid
-to pay off the debt. -You don't get any sales points?
No, I don't get any points for that.
[Erica]
At RBC, this advisor also tells us to just pay off some.
[RBC advisor]
[Erica]
to pay it off.
[RBC advisor]
[Sandi] Encouraging somebody to only pay off a little bit
of their debt and then move it around to get a little bit less,
like a lower interest rate, that is still bad advice.
[Erica]
investing in mutual funds that earn them sales credits.
They're not allowed to guarantee the returns
on those investments, so will they?
At CIBC, seems like it's a sure thing.
[CIBC advisor]
[Kimberly] Right.
He's guaranteeing absolutely more than 10%. Can he do that?
No. Oh, no. He absolutely, unequivocally cannot guarantee
any number from a mutual fund.
[Erica]
they felt they had to sometimes cross the line
just to sell those investments.
The TD insider recorded another manager
telling her to snoop around a client's accounts.
His words are read by someone else.
[TD manager 2]
[Erica]
the bank wants to sell.
TD tells us the recorded conversations
are completely unacceptable
and do not meet their code of conduct.
As for the former Scotiabank advisor,
his breaking point? The death of a client's husband.
[Scotiabank insider] I mentioned this to my direct supervisor,
and the first question he asked me was,
"Are we still getting their investments?"
That was the first thing he cared about.
That's when it really hit me, that...
there's no compassion at all.
Uh, it's all about the numbers.
[Erica]
when it comes to investments?
Back on hidden camera, we're asking about the fees
charged on those mutual funds.
They're important, because a typical fee of 2.5%
could eat up almost half the value of your portfolio
over 25 years.
So, our final check:
what will advisors who have to sell mutual funds to hit targets
tell us about the fees?
At BMO...
The advisor incorrectly says the fees are only charged
on any profit that $50,000 inheritance earns,
not the nest egg itself.
[Kimberly]
[BMO advisor]
[Erica]
they're only charged on any profit.
[Kimberly]
Or--
[TD advisor]
[Erica]
says the fees apply to the whole investment,
but claims they're no big deal.
[RBC advisor]
[Kimberly] Right. I see. Okay.
[Erica]
he doesn't know how the fees work.
[Scotia advisor]
So, Sandi, your head was literally in your hands.
Oh, it's so bad.
And...
I genuinely believe that those frontline advisors
don't know the answer.
-They are guessing. -They're licensed
mutual fund dealers.
Oh, that bar is so low.
[Erica]
and correct info on mutual fund fees.
Do you think the pressure to sell products
was behind some of the advice we got?
Almost all of the advice that you got,
I think, was influenced very heavily
by the pressure to sell financial products.
Hey, Duff, Erica Johnson, with CBC.
Duff Conacher is a consumer advocate
who's kept an eye on the banks for decades.
His take on what we've seen?
They're not only getting bad advice,
they're getting illegal advice.
[Erica]
that require banks to not take advantage of customers,
and offer appropriate products and services.
So what we documented, you say, is breaking the law?
Yes. Yeah, I think very clearly the advice that was given
violates the duty in the Bank Act for the banks
to act in the financial interests of their customers.
All five banks declined our request for an interview,
and pointed us to the Canadian Bankers Association.
In a statement, it says, "Our findings
do not reflect the experience millions
of Canadians have every day at the banks."
They add that a more formal analysis of the client's needs
is expected to be performed when moving from
an initial conversation, to establishing an investment.
♪
[Erica]
for the little guy, who is?
The agency just needs to follow Law Enforcement 101.
[Erica]
after the break.
Got a story you think Marketplace should investigate?
Reach out to us at marketplace@cbc.ca.
[Erica]
From the misleading...
...to the downright wrong.
Duff Conacher says the bank's regulator
is letting them off the hook.
The agency just needs to follow Law Enforcement 101,
which means you're doing regular,
unannounced inspections.
When you catch violations, penalties have to be high enough
to take away any profit that the bank
made from violating the law.
[Erica]
won't talk on camera.
In a statement, it says it's had concerns about
banks' sales practices, and takes the matter very seriously.
Adding, "Banks should only sell products to consumers
if it's appropriate, and must ensure employees
have the skills to fulfill that responsibility."
Ultimately, the buck stops with
Finance Minister, Chrystia Freeland.
For weeks, we've requested an interview,
but her office says no.
We learned she's attending this mining conference in Toronto.
So, we try again in person.
[Charlsie] Minister Freeland,
this is CBC Marketplace.
We're hoping to speak to you about a story
we're doing about sales pressure within the banks.
[Erica]
[Charlsie] Minister Freeland,
do you have a moment to speak with CBC Marketplace?
Sorry, we're just running to the-- apologies.
[Charlsie] We've been documenting
sales pressures in the banks.
We found bank employers giving inaccurate advice.
[Erica]
Later, her office sends a statement saying,
the government has zero tolerance
for banks offering misleading information
or inappropriate financial services.
And they say they've taken action,
added consumer protections to the Bank Act.
Hmm... Those protections were in place
during our hidden camera test.
So, until consumers are better protected,
our expert has this message:
Just do a little bit of research into the evidence of good,
sound financial advice, and then you're going to be
hearing these pitches with very different ears.
That's what I want people to do.