Yahoo Finance How to avoid the upsell at the bank: be strong and just say 'no'
Following a series of articles from CBC where employees of Canada’s “Big Five” banks (Scotiabank, BMO, RBC, CIBC and TD) allege that they are forced to upsell, cheat and outright lie to customers so they can hit sales targets for fear of losing their jobs, the Financial Consumer Agency of Canada [FCAC] announced an investigation into the “business practices of the financially-regulated financial sector” beginning in April 2017.
But until the results of the investigation are acted upon and the government puts a stop to them, how can customers of these banks anticipate or protect themselves from these alleged unethical and illegal sales tactics?
Jonathan Bishop, research analyst in parliamentary affairs at the Ottawa office of the Public Interest Advocacy Centre [PIAC] says just say no.
Just say, ‘No!’
“It sounds simple but that’s the simplest answer I can provide,” he says. “Say no, I’m not interested or say, ‘Do you have something in writing that I can take home and review?’ Say anything to walk away from that conversation or potential commitment if you have no interest in the product being sold.”
Always check your statements and make sure credit or overdraft amounts have not mysteriously increased from month to month and there are no fees or charges you don’t recognize. If there are these red flags, you may need to lodge a complaint against the bank.
Of course all five of these banks have a complaints process that’s outlined on each of their websites. Beyond that, all banks have an Ombudsman’s Office designed to address complaints and take them up the corporate ladder. Even beyond that however, there’s another layer of service specifically designed to address complaints independent from a bank’s corporate governance.
“Some banks use the Office of Banking Service and Investment [OBSI] or another independent arbitration service that would be listed on the bank’s website that can take your complaint as well even after you’ve dealt with your bank and you’ve simply had enough,” says Bishop.
If that still doesn’t work, you can always bring your complaint directly to the FCAC. But, as many of the employees at the banks in question admitted, they had increased credit and overdraft limits without the client even knowing that’s what was happening, just to make sales targets. What do you do when not only are you signed up for a product or service you didn’t want, but you’re also signed up for a product or service you didn’t even know you had?
Consent is king
Unfortunately, when the consumer doesn’t know the bank has signed them up for something they didn’t want, there’s pretty much nothing they can do. There’s no specific tells a teller may give away and no specific lines they may use.
“In certain instances, consent may not be given and disclosure may not be had. In that case, it’s very difficult for the consumer to be proactive, if they’re unaware,” says Bishop.
Such instances underscore a systemic problem highlighted in the FCAC’s investigation announcement.
“The law requires that in order to provide customers with new and expanded products or raise their credit limits, the financial institution must obtain the customer’s prior consent and disclose key information about the costs and charges for the products they are purchasing,” says FCAC Commissioner Lucie Tedesco in the statement.
“Financial institutions compliance with these rules is non-discretionary and that message must be disseminated from the board of directors on down to the customer-facing staff,” the statement continues.
The scope of the FCAC investigation includes an examination of all financial institutions’ business practices as they relate to consent and disclosure, including a noting of all factors that may cause the financial institutions to not comply. For its part, the Canadian Bankers’ Association [CBA] – a financial lobbying group representing 61 domestic, foreign and foreign bank subsidiaries in Canada — fully supports the upcoming investigation.
“The CBA and its member banks look forward to cooperating with the FCAC in the review announced today…As they have with all previous reviews, Canadian banks will cooperate fully and constructively with the regulator…It’s important that this review be completed in a timely way. We are confident that the banks’ strong policies, procedures and controls are functioning well,” read part of a statement from CBA president Terry Campbell.
A Financial Consumer Code
The PIAC would like to see the typical review process kicked up a notch with the introduction of a Financial Consumer Code, which they have advocated for over the last few years.
“We think that kind of a code would provide clear rules of the road between banks and consumers. In addition to a code, a chance to address complaints when they feel their trust has been compromised by those institutions. Basically, a complaint resolution service,” says Bishop.
Unlike the current complaint process managed internally by the banks, this would be an impartial complaint manager that everyone can go to, which would hopefully simplify the process of lodging complaints and eliminate bias.
“Our thinking is if there was a single document everyone can look at with very clear rules, ‘Banks must do X, banks must do Y’ and consumers see evidence that tells them, ‘I don’t think you did X there, that’s concerning, they can have an impartial individual or service take a look at all the evidence and decide if there were potential violations,” says Bishop.
