Monday, June 12, 2017
Canada’s big banks defend themselves at parliamentary committee #ForTherecord #BMO #TWU #Money #Investing #Finance #Mortgage # MoveMyMoney #BMOfiasco
OTTAWA—Canada’s big banks defended their business practices Monday before a parliamentary committee that’s been exploring allegations of questionable sales methods at major financial institutions.
The committee launched the hearings following media reports citing unnamed employees at the five largest banks who alleged they were pressured to sell unnecessary products and services in order to boost profits and meet difficult-to-reach sales objectives.
Representatives of the country’s largest banks strongly denied that such accusations were part of their cultures.
Yet most acknowledged that occasional cases of inappropriate behaviour are possible, since the financial institutions are massive operations with many client interactions.
The bank officials represented CIBC, Scotiabank, TD, BMO, RBC and the National Bank of Canada, which was not named in the series of reports by the CBC.
They all insisted the needs of their customers always come first, which they argued was a crucial ingredient for a successful banking business.
The bankers also say they enforce codes of conduct, invite staff and client feedback through confidential channels, regularly offer fresh training for employees and are determined to address any inappropriate sales behaviour.
They all said the allegations that appeared in the reports are unacceptable and that all issues with client interactions are taken seriously.
Andrew Pilkington, TD’s executive vice-president of branch banking, said after the allegations emerged, he travelled to his company’s locations across Canada to find out if employees felt intense pressure to sell.
“Our employees — the vast majority — feel that’s just not the case,” Pilkington said.
“We’re not saying we’re perfect, in fact, this is a good time for us to stop, pause, reflect (and) see what else we can do to actually strengthen our controls so that we can absolutely mitigate the risk that you’re talking about.”
Andrew Auerbach, an executive vice-president for BMO, told the committee his bank would never suggest selling products that are not appropriate for the customer.
“It’s just not consistent with who we are as a company,” Auerbach said, adding that when instances of inappropriate behaviour are identified, they’re thoroughly investigated, case by case, and action is taken.
The CBC said that after its initial report, it received nearly 1,000 emails from employees of the five largest banks. The workers alleged in the emails that they felt pushed to “upsell, trick and even lie to customers” to reach goals constantly tracked by their employers.
“Issues that came to light in the media have never, ever been mentioned, to me anyways, through my tours through the banking centre network,” said Scott Wambolt, senior vice-president for CIBC.
“There are a number of checks and balances in the system to make sure that if an employee or a customer feels that something inappropriate has happened that they can raise the issue through a number of different channels.”
James McPhedran, a Scotiabank executive vice-president, testified that his bank always makes it clear to employees that it does not compromise its ethics to meet sales or other targets.
“Adherence to our code of conduct is non-negotiable,” he said.
Kirk Dudtschak, an executive vice-president for RBC, told the committee his bank doesn’t take for granted the role it plays in the lives of its employees and clients.
The committee has already heard from Financial Consumer Agency of Canada commissioner Lucie Tedesco. Her agency has launched a review of bank business practices and she said the initial findings are due by the end of the year.
Tedesco said if the review discovers that laws were broken, her agency will conduct investigations and take any necessary enforcement measures, which could include penalties against the financial institutions.
Last week, the committee heard allegations through first- and second-hand accounts made by former bank employees that workers feel pressure to hit unreasonable sales goals, entice clients into raising their credit-card limits and offer mortgages beyond what clients can reasonably afford.