Expressing concerns over recent allegations related to the sale of products and services by financial institutions, the Financial Consumer Agency of Canada (FCAC) has announced that its next review of business practices in the federally regulated financial sector will begin next month.
In a statement issued March 15, FCAC Commissioner Lucie Tedesco said, "FCAC is responsible for enforcing federal financial consumer protection obligations. The law requires that, in order to provide consumers with new or expanded products or increase their credit limits, financial institutions obtain their customers' prior consent and disclose key information about the costs and charges of the products they are purchasing.”
Compliance with rules is non-discretionary
Tedesco added, "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. These issues have been discussed in my recent meetings with the CEOs and boards of Canada's leading banks."
As reported March 13, TD Bank Group is on the defensive after CBC’s Go Public published articles citing bank employees who have anonymously said that the bank sets sales targets that pressure them to sell products that the customers don’t need. On March 15, CBC published another story that quotes employees from other Canadian banks who say they are also pressured to upsell clients to meet unrealistic sales goals.
FCAC will investigate incidences of non-compliance
In FCAC’s announcement, Tedesco promises enforcement on any incidence of non-compliance with business practice rules. "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. We will investigate and enforce any incidence of non-compliance."
FCAC is also encouraging consumers who have experienced what they believe to be misleading business practices, or who have received a financial product or service to which they did not consent, to file a complaint with their bank and with FCAC's Consumer Services Centre at email@example.com.