Unethical sales practices emphasize the need for a financial consumer code

Unethical sales practices emphasize the need for a financial consumer code

Unethical sales practices emphasize the need for a financial consumer code The major revelations from employees of the TD Bank Group underscored the pressing need for a financial consumer code in Canada, according to a consumer interest organization.

The Public Interest Advocacy Centre noted that the controversial sales practices, as revealed to CBC News earlier this week, “present a bit of a grey area” that might not fall under the jurisdiction of current financial regulators.

In the CBC News exposé, hundreds of current and former TD employees admitted to breaking the law when attempting to meet unrealistic sales targets, all at the expense of their clients. The whistleblowers told of a maximum-pressure environment that they described as “insane,” “poisoned,” and “stress inducing,” with “zero focus on ethics.”

Among the alleged unsavory practices included the signing up of clients for certain financial products and services without their consent.

“We think that the proposed financial consumer code will provide a clear set of rules of the road, rules of engagement, between the banks and consumers,” PIAC research analyst Jonathan Bishop said, adding that such a code will have to be enforced by an independent organization.

“Banks will have the opportunity to present evidence to an arbitrator about what they've done, and their tactics, as well as consumers have the opportunity to present their concerns and their views,” Bishop explained.

In the wake of the disclosures, the Financial Consumer Agency of Canada announced on Wednesday (March 15) that it will be launching a review of the major banks’ business practices next month.

FCAC commissioner Lucie Tedesco issued a statement reminding lenders of their obligations to secure prior consent before increasing lines of credit and providing customers 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.”


Related stories:
Financial Consumer Agency launches review of business practices at banks
Not just TD?
 
2 Comments
  • George 2017-03-17 9:51:07 AM
    This is business my friend. This is no different than any business trying to sell and make a profit.
    The regulators are just trying prove they provide value.
    Regardless, the $500,000 penalty is a joke and a rounding error for the quarterly results of the banks.
    Post a reply
  • Ron Price 2017-03-20 11:26:23 AM
    Totally disagree with you George.
    Most businesses do not lie, deceive, cheat, manipulate their (valued) customers nor bully and shame employees in front of peers if sales targets are not met.
    Unfortunately zero ethics and out of control greed is now the norm at our banks.
    Profits have doubled since 2010. Bank CEO's average salary is $10 Million a year plus another $10 Million bonus amidst cost cutting measure, layoffs, outsourcing and a weak economy.
    Regulators are powerless, making six figure salaries. They will have little impact. Major reform is necessary so that ethics, disclosure and transparency are required in order restore trust in the banks. A people's revolt might be necessary. It's simply gone way too far.
    Post a reply