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Business MARKETPLACE


HIDDEN CAMERAS CAPTURE BANK EMPLOYEES MISLEADING CUSTOMERS, PUSHING PRODUCTS
THAT HELP SALES TARGETS

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CRITIC SAYS FINANCE MINISTER MUST DO MUCH MORE TO PROTECT CONSUMERS

Erica Johnson, Jeremy McDonald, Madeline McNair, Kimberly Ivany, Michelle McCann
- CBC News



Posted: March 15, 2024

This TD Bank employee recorded conversations with managers who tell her to think
less about the well-being of customers and focus more on meeting sales targets.
(CBC)

Michelle Jeraline says she's so stressed out by the pressure to sell customers
products at TD Bank, it's affected her health. 

The TD employee says she's usually not acting in the best interest of her
clients — she's trying to sell them products that will help her meet sales
targets and keep her from being fired.

"It's weighing on me," she said. "And it doesn't feel good." 

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CBC is not using her real name and has agreed to conceal her identity, because
she fears losing her job. And she's not alone.

 * Got a story you want investigated? Email us: Marketplace@cbc.ca

Marketplace has spoken confidentially to current and former bank employees from
all the big banks: TD, RBC, BMO, Scotiabank and CIBC. CBC is concealing their
identities because they fear professional repercussions. All expressed similar
concerns about enormous sales pressure they say leads to potentially costly or
otherwise dangerous financial products being pushed on customers. 

"I had to mislead customers into getting products that they didn't need, to
reach my sales target," said a recent BMO employee.

"It's not a customer service … environment," a former Scotiabank employee said.
"We're there to sell — and make money for the bank."  


'YOU WERE SCARED TO LOSE YOUR JOB'

Employees at all the banks Marketplace spoke with described weekly — often daily
— meetings with managers, aimed at getting employees to push more products on
customers. 

Some branches circulate regular emails, too, they said, listing employee names
and how many products and services each person has sold.

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"If you're on the bottom … you were scared to lose your job," said the former
BMO employee.

The bank employees told Marketplace the pressure to push products and services
is especially egregious during these tough financial times, when inflation is
up, interest rates are high and Canadians are feeling financially stressed. 

WATCH | What Marketplace found going undercover at 5 big banks: 

Show more
Current and former employees of Canada's big five banks speak out about what
happens behind closed doors — the enormous pressure to push financial products
to customers.  2:49



To test the sales culture, Marketplace took hidden cameras to teller wickets and
into the offices of financial advisors at the big five banks. 

We were pitched everything from pricey credit cards to lines of credit, given
poor advice about debt and misinformation about mutual funds. Hidden cameras
also repeatedly caught bank employees breaking the law, according to consumer
advocate Duff Conacher.

"What you describe is rampant violation," said Conacher, co-founder of Democracy
Watch, referring to the Bank Act, which governs the behaviour of Canadian
financial institutions.

ADVERTISEMENT



None of the banks agreed to an on-camera interview request.


PREVIOUS INVESTIGATION EXAMINED SALES PRESSURE

In a statement from the Canadian Bankers Association, a spokesperson said, "The
examples described do not reflect the experience millions of Canadians have
every day with employees at Canada's banks."

CBC has previously examined retail sales pressure inside the big banks. CBC's Go
Public team began investigating in 2017, after three TD Bank employees spoke out
about sales targets they considered unethical and harmful to customers.



 * Go Public 'I will do anything I can to make my goal': TD teller says
   customers pay price for 'unrealistic' sales targets



Over the next few months, more than 3,000 current and former employees from all
the big banks contacted CBC to speak out about sales pressure, resulting in an
investigation by the Financial Consumer Agency of Canada (FCAC), the banking
regulator.

The FCAC  issued a report in 2018 that found a focus on sales targets was
increasing the risk of banks placing sales ahead of the interests of customers.

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Bank employees tell CBC that in the wake of that investigation, sales targets
generally dropped. 

But now those targets are back up, they tell Marketplace, at a time when
Canadians are feeling the financial squeeze.


EMPLOYEE MADE SECRET RECORDINGS

"I have had an increase of clients … upset, having to take money out of their
children's RESPs to pay their bills," said TD employee Jeraline. "If they need
to take money out, we have to do what we can to stop it."

She says she became so distraught about the sales culture, she started making
secret recordings of "coaching sessions" with her managers, which she shared
with Marketplace.



This recent BMO employee says he quit because the pressure to sell products was
'unethical,' adding that colleagues were often so stressed by sales targets they
cried at work. (CBC)



In one recording, a manager tells Jeraline that in order to make more sales, she
should remember that she does not work in customer service. 

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"We are investment advisors," he says. "You have to have a bit of aggression."

Unlike registered financial advisers, financial advisors (spelled with an "o")
at banks have no fiduciary requirement to their customers.

In another recording, a manager tells Jeraline she's being too nice to
customers.

"You think of them a lot," says the manager. "It kind of backfires for you, in
meeting your [sales] goal."

A TD Bank spokesperson said in a statement that the recorded conversations are
"completely unacceptable" and go against the bank's code of conduct, performance
policies and training.


DEBT PRODUCTS PUSHED ON HIDDEN CAMERA

To test what products might get pitched at the teller wicket, Marketplace sent
colleagues wearing hidden cameras into two branches of each of the big five
banks in Toronto and Vancouver. 

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When tellers input a customer's information, specific "opportunities" — products
and services — pop up on the screen, bank insiders tell Marketplace.

For instance, if a customer had a no-fee credit card, the screen would advise
tellers to try to upgrade the card to one with annual fees and provide language
to help the sale.

"It would show a script on the bottom saying, 'The first year is free.'
Something like that," said the former BMO employee.



Marketplace testers who visited tellers at the big five banks were pitched
everything from a credit limit increase to a $25,000 line of credit. (CBC)



At RBC, our tester was offered a new credit card and told it was "cool" he could
get an $8,000 increase to his credit card limit.

A TD teller said our tester had been "such a great client" that she, too,
qualified for a new credit card — no income check required.

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Marketplace showed excerpts of our hidden camera findings to certified financial
planner Sandi Martin, who used to work for a big bank, but left over a decade
ago because she couldn't stomach the sales environment.

She says the banks are the big winners when someone signs up for a credit card —
they've got high interest rates. 

"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," said Martin.



Certified financial planner Sandi Martin says people need to know that banks
'are a store for financial products — they’re not a service anymore.' (Kelly
Warne)



At BMO, our tester was pitched an upgrade to a more expensive chequing account.
The teller explained that there was no cost if our tester maintained a $6,000
balance, but didn't mention that if the account ever dipped below $6,000, there
would be a $30 monthly fee. 

The teller said the premium account included an upgrade to a credit card with
fees, but those fees would be waived. "It's like there's no cost," he said. 

ADVERTISEMENT



At a different BMO branch, a teller pitched a $25,000 line of credit and claimed
it was a special deal. "It's not all clients will have this kind of offer," said
the teller.

But Martin says being pitched an unsolicited line of credit should not be seen
as some sort of special deal.

"This, of course, is spam," she said, noting the customer wasn't asking for
anything "but somehow they're getting a financial product … that they'll pay
for. And somehow they feel like they're being done a favour." 

Martin pointed out that once people have access to credit — such as a line of
credit or a credit card — they are likely to access it, which can lead to debt
that's hard to pay off.


ADVISORS DON'T RECOMMEND PAYING OFF CREDIT CARD

In a second test, Marketplace sent a colleague wearing hidden cameras to meet
with financial advisors at the big five banks.

She posed as a customer with a $50,000 inheritance coming soon and wanted
financial advice. If asked, she said she also had a $350,000 mortgage and
$17,000 in credit card debt.

ADVERTISEMENT





A Marketplace producer posing as a customer with a $50,000 inheritance visited
advisors at all five big banks, to test what financial advice she was given.
(CBC)



None of the advisors asked about existing debt, instead recommending that our
tester invest the full $50,000 in products like GICs and mutual funds, which
help bank employees hit their sales targets. 

When our tester raised the credit card debt herself, only BMO and CIBC clearly
recommended that she use part of the supposed inheritance to pay it off in
full. 

The advisor at Scotiabank suggested our tester only pay off "a portion" of the
credit card debt, saving the rest of the inheritance to buy mutual funds.

The TD advisor first suggested our tester only make the minimum payment on the
credit card debt, explaining that this would protect her credit score. 

She later suggested "part" of the credit card debt could be paid, leaving the
rest of the inheritance for investments.

ADVERTISEMENT





This former Scotiabank employee says a whiteboard in the office showed
everyone’s sales for the week. 'We're there to sell — and make money for the
bank,' he told CBC. (CBC)



At RBC, the advisor first pitched opening a line of credit — which would incur
monthly interest fees — to pay off the debt. She then suggested just paying some
of the credit card debt, saving the rest of the inheritance for mutual funds. 

The test results don't surprise a former Scotiabank senior financial advisor,
who told Marketplace he wasn't encouraged to help clients pay off debt. 

"I don't get any [sales] points for that," he said.


'THEY'RE GETTING ILLEGAL ADVICE'

Not advising a customer to fully pay off high-interest debt is a violation of a
section of the Bank Act that says advice given to customers must be
"appropriate," says consumer advocate Conacher.

"The number one advice that any good financial adviser will give you is pay down
your highest interest debt first. And the advice was the opposite," he said. 

ADVERTISEMENT



"They're not only getting bad advice, they're getting illegal advice."

Marketplace also wanted to hear what advisors would say about the fees
associated with mutual funds. 

During the five visits to the banks, advisors at BMO, Scotia and TD incorrectly
said the mutual fund fees are only charged on the profit the investment earns,
not the entire lump sum. The CIBC advisor wasn't clear about the fees.

At RBC, the advisor correctly told the tester that if she wanted to invest her
inheritance in mutual funds, a fee applied to the entire inheritance and any
profit, but said the fees were nothing to worry about.



Consumer advocate Duff Conacher says the banks are getting away with mistreating
customers because the retail banking regulator does little to crack down. (CBC)



In fact, Martin, the financial planner, confirmed that a typical mutual fund fee
of 2.5 per cent will reduce the potential value of a portfolio by almost half
over 25 years.

ADVERTISEMENT



"People are being taken advantage of," said Martin. "If anybody ever looks at,
'Why do the banks make so much money?' In part, it's because they're extracting
it from everyday people who just want to save for their retirement."

All that mutual fund fee misinformation is also breaking the law, according to
Conacher, who says a section of the Bank Act says employees must not "take
advantage" of customers.

"If you're giving them misinformation, you've taken advantage of them because
the bank is benefiting," he said.

None of the five banks responded to claims their employees had broken the law. 

The FCAC declined an interview request, instead sending a statement that said it
has had "concerns with banks' sales practices and takes the matter very
seriously." 

It also said that under new legislation that came into effect in 2018, banks
have an obligation to offer products or services that are "appropriate" for
consumers and are not allowed to provide "false or misleading information."

ADVERTISEMENT




MORE BANK INSPECTIONS NEEDED

Conacher called the FCAC a toothless watchdog. He said that in order for it to
be effective, it needs to do regular, unannounced inspections of the banks, and
when it catches violations, it should make the penalties high enough to
eliminate any profit a bank made from violating the law.

"Unfortunately, the agency has done none of those things in the last 20 years,"
said Conacher.

He points out that the FCAC has issued less than $20 million in fines over 20
years, whereas regulators in the U.S. and U.K. have issued billions in fines in
just 10 years. 

"It's not showing any interest in protecting consumers," said Conacher. "It's
showing much more interest in protecting the banks from accountability."

The federal finance minister oversees the FCAC, but Chrystia Freeland declined a
request for an on-camera interview and avoided questions when Marketplace caught
up with her at a recent Toronto event.  

In a statement, a spokesperson from Freeland's office wrote that the government
has "zero tolerance" for banks offering misleading or inappropriate financial
advice, and has introduced new consumer protections in the Bank Act.

ADVERTISEMENT



Those protections were in place during Marketplace's hidden camera test. 

Jeraline, the TD employee, says she doesn't see the sales culture at the bank
changing anytime soon, but can't quit because she has bills to pay.

"I feel bad, but I mostly feel disappointed in the company," she said. "I'm
sorry we're not able to provide you with adequate financial advice."


ABOUT THE AUTHOR



Erica Johnson
Investigative reporter

Erica Johnson is an award-winning investigative journalist. She hosted CBC's
consumer program Marketplace for 15 years, investigating everything from dirty
hospitals to fraudulent financial advisors. As co-host of the CBC news segment
Go Public, Erica continues to expose wrongdoing and hold corporations and
governments to account.

 * Go Public

CBC's Journalistic Standards and Practices


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