Manulife Bank Advantage Account

Manulife Bank

Manulife Bank

This might be the most useful savings account in Canada

A 131-year-old insurance company has out-innovated everyone in making savings accounts more useful for everyday banking.

New and nimble financial technology companies – fintech – have brought some cool products to personal finance. But the Manulife Advantage Account, offered through the banking division of insurer Manulife Financial Corp., shows there are still some flickers of creativity in the old guard of financial services.

The Advantage account fills a gap for people who bank online and want to park their savings in an account that provides both a decent rate of interest and some utility for paying bills and accessing cash.

Keep a minimum of $1,000 in the Advantage account and you can do unlimited banking for free. Among the included transactions are debits, Interac e-transfers and withdrawals through 3,700 ATMs in the Manulife and Exchange networks.

The Advantage account is technically savvy, too. With paperless account opening, you can get an account up and running on your mobile phone or tablet without mailing anything. There’s also a mobile app that allows you to log in using your phone’s fingerprint reader as a password replacement, and to deposit cheques by photographing them.

The Advantage account was relaunched in February as part of Manulife Bank’s push to raise its rather modest profile. “Manulife Bank is banking’s best-kept secret in Canada,” CEO Rick Lunny said in an interview. “Frankly, I don’t think too many Canadians have even heard of us.”

Manulife Bank started out 25 years ago as something that Manulife Financial’s adviser network could offer to clients. Until now, the bank’s singular contribution to personal finance has been Manulife One, a combined mortgage and chequing account. The benefit here is that cash in your account — say, your paycheque — counts against your mortgage debt and thereby helps cut your interest costs. The Manulife One account also functions as a line of credit that lets you re-borrow what you paid down on your mortgage.

Manulife Advantage looks especially sharp in comparison to what the online banks Tangerine (owned by Bank of Nova Scotia) and Simplii Financial (owned by Canadian Imperial Bank of Commerce) have to offer. Both offer separate no-fee chequing accounts, which means there’s an intermediate step before paying bills or making purchases.

Manulife Advantage lacks the fintech halo of uniqueness, but it has something that is arguably better in the form of brand recognition for the Manulife name. Mr. Lunny said one in three Canadians already has a relationship with Manulife Financial through its insurance products or its group benefits and retirement plans in the workplace. “When you’re a startup, you don’t have that sort of trust and loyalty,” he said.

Whether or not you’ve tried a fintech app, you owe these scrappy upstarts some thanks. The threat they pose is motivating the old guard of personal finance to up their game and offer useful innovations like Manulife Advantage.

For more information about Manulife’s Advantage Bank account click here.

Originally published April 19, 2018, by Rob Carrick, personal finance columnist

Estate Planning

IIROC fines TD Waterhouse $4 million for “a willful business decision”

By: James Langton, March 23, 2020

IIROC staff argued the non-compliance was “a willful business decision”

The Investment Industry Regulatory Organization of Canada (IIROC) has fined TD Waterhouse Canada Inc. $4 million for failing to comply with certain provisions of the Client Relationship Model (CRM2) reforms.

An IIROC hearing panel handed down a record fine after finding that the firm made a deliberate business decision not to comply with CRM2 requirements to provide position cost information in quarterly retail client account statements for certain securities positions.

The non-compliance resulted in an estimated 175,301 clients who held positions that were incorrectly reported as “not determinable” when the information was available, the panel said.

“A failure of such magnitude is not, by any measure, a minor transgression,” it said.

According to the panel’s ruling, the firm was capable of becoming fully compliant with the position cost requirements of CRM2 by the end of 2015.

“However, in the spring of 2015, the respondent identified what it considered to be potential litigation risks and client experience issues that might have resulted,” the ruling said.

The firm decided to adopt an “alternative solution to avoid the problem,” which resulted in about 8% of client positions being offside with the requirements, it said.

IIROC discovered that the firm wasn’t compliant after investigating a client complaint.

According to the hearing panel’s decision, the firm largely admitted to IIROC’s allegations, but argued that it intended to comply with the requirements. The firm suggested that a fine of around $500,000 was warranted.

However, IIROC staff argued that the non-compliance was “a willful business decision,” which merited the maximum fine ($5 million).

The hearing panel largely sided with IIROC staff. It said that it was “unpersuaded by the [firm’s] argument that it did not refuse to comply with the new rule.”

The panel found that this was a business decision that was signed off on by the firm’s senior management, and that it was a failure of governance.

“Consultation with IIROC should have been the first step for TDW. Its failure to do so is damaging to the integrity of the regulatory regime. The fact that a premier financial institution acted in such a manner provides extremely poor leadership for the other members of IIROC,” the panel said in its ruling.

The panel declined to impose the maximum fine, citing the lack of client harm caused by the firm’s actions.

In devising sanctions, the panel said that the facts of this case are unique.

“There are no cases which come close to being comparable to the respondent’s willful decision not to follow [an IIROC rule] and to ignore the regulator until the misconduct was discovered and a complaint was made. We had to fashion a sanction that is appropriate for such an act of fundamental disobedience to the applicable rules,” it said.

“In short, we believe such a fine will provide both general and specific deterrence to all those inclined not to respect their obligations to obey the regulatory rules,” it said.

The firm was also ordered to pay $28,497 in costs.

Solutions Banking All-in-One

Banks sell mortgage insurance, but independent experts say you shouldn’t buy it

A woman helps a girl ride a bike in front of a house in Brampton, On. on May 20, 2017.

Personal finance experts are a pretty soft-spoken bunch. It isn’t often that they say they would “never ever” advise buying a certain financial product.

But that is exactly what they generally say when asked about mortgage protection insurance, according to Anne Marie Thomas of, an insurance comparisons site.

READ MORE: Why homebuyers should stay away from this popular financing strategy

Mortgage protection insurance isn’t the mortgage insurance most Canadians are familiar with, the one you need to buy, generally from the Canada Mortgage and Housing Corp. (CMHC), when your down payment is less than 20 per cent of the value of your home.

READ MORE: CMHC mortgage insurance premiums: Here’s how much costs rose across Canada as of today

Unlike the better-known mortgage insurance, which protects lenders if homeowners default, mortgage protection insurance is, essentially, a type of life insurance. It covers your mortgage debt if you die or become disabled.

Banks generally try to sell homeowners this type of insurance when they sign up for a new mortgage. Insurance premiums are then seamlessly added to their monthly mortgage payments.

So, what’s not to like about that?

A lot, according to Thomas:

1. The payout from mortgage protection insurance shrinks with your mortgage

These kinds of policies only cover your outstanding debt, meaning the payout gets smaller and smaller as you pay off your mortgage. Insurance premiums, on the other hand, stay the same through the insurance term.

READ MORE: Do unpaid debts ever disappear?

2. You may find out when you file a claim that you aren’t eligible for coverage

Mortgage insurance policies are “typically underwritten after the fact,” noted Thomas. This means that the insurance company will only take a close look at your case once you file a claim. And it may very well find that something in your particular situation violates the insurance contract, which would leave your family without coverage just when they need it most.

If you purchased mortgage protection insurance, comb through your policy carefully to make sure there’s nothing that could potentially exclude you for coverage, advised Thomas.

READ MORE: Think you don’t need insurance when travelling in Canada? Think again

3. Your might get saddled with higher premiums when you renew your policy

With mortgage protection insurance, you’ll need to renew your policy at the end of your mortgage term, said Thomas.

Your new premium will be based on your — now smaller — outstanding mortgage balance, but that doesn’t mean you’ll be paying less. Because you’re a bit older, your premium won’t necessarily go down — in fact, it may go up, Thomas told Global News.

READ MORE: Home renovations: The 4 big risks of borrowing against your house to pay for it

4. Your bank, not your family, pockets the payout

Assuming the claim goes through, mortgage insurance guarantees your family won’t have to worry about mortgage payments if you die or become disabled.

In case of death, your beneficiaries can counts on a lump-sum payout that will take care of the outstanding balance, according to Jason Heath of Objective Financial Partners, a fee-only financial planning firm. In case of disability, the policy will generally cover your monthly mortgage payments until the debt is extinguished, he added.

But does it make sense to use the money to pay off the mortgage?

Not necessarily, said Heath. Perhaps your survivors could have easily eliminated mortgage by selling the house. Or they might have preferred to use the money for other purposes, while keeping up with your mortgage payments.

Mortgage protection insurance means any payout will flow out to your mortgage lender, not to you or your family, noted Thomas. And that’s much like CHMC insurance.

READ MORE: Here’s how much climate change can cost homeowners in damages

Consider plain life insurance instead

Skipping on mortgage protection insurance doesn’t mean you have to go without coverage. Instead, you could buy life insurance, both Thomas and Heath said.

With life insurance, your payout remains the same through the term of the policy and the money comes with no strings attached.

For example, if you had a $300,000 mortgage and took out a policy for the same amount, your beneficiaries would still receive $300,000 even if you had paid down your mortgage in full by the time the claim is filed.

And life insurance is generally much cheaper, too, said Thomas.

“It typically could end up costing you half as much,” she said.

WATCH: Here’s how your selfie could one day affect your life insurance

Why does anyone get mortgage protection insurance, then?

Many homebuyers, especially those buying their first home, haven’t done enough research to know what they’re getting into, said Thomas.

“Generally, the way it’s offered to [homebuyers] is when they’re sitting there, signing a whole bunch of [mortgage] paperwork and they’re bored and they’re starting at the wall,” said Heath.

When the bank proposes adding mortgage protection insurance, “for most people, it’s a five-second decision.”

WATCH: Paying off your mortgage in three years

Banking and mortgage industry professionals are often under enormous pressure to sell mortgage insurance, and benefit handsomely through commissions when they do, said Heath.

“Your friendly neighbourhood banker is financially motivated to get you to buy mortgage insurance, whether it’s in your best interest or not,” he added.

That may be why, a few years back, Heath himself discovered in his first-ever mortgage statement that he was, in fact, paying for mortgage protection insurance even if he had clearly declined coverage.

Heath eventually got his lender to cancel the policy and refund the premiums.

But many homebuyers aren’t well-informed enough to know they shouldn’t have signed up for the service in the first place.

“Mortgage [protection] insurance is very expensive, but it’s a captive market,” said Heath.

Credit union employees say high-pressure sales targets turn ‘members’ into ‘marks’

Dozens of employees from credit unions across the country tell Go Public they feel the same pressure as bank employees to meet high sales targets, often to the detriment of their members.

They’re speaking out after employees from Canada’s big five banks revealed they often push customers into expensive financial products they don’t need to generate sales revenue and hold on to their jobs.

“We brag about being better than the banks, but when it comes to upselling we’re exactly the same,” said a former longtime employee at B.C.’s Coast Capital Savings, the third-largest credit union in the country based on assets.

CBC is concealing the identities of the former employees quoted here because they still work in the financial industry or hope to do so again in the future.

Coast Capital Savings is the third-largest credit union in the country based on assets.

The former Coast Capital Savings employee says he recently quit after seeing sales targets ramp up so high “we stopped acting for our members, and only cared about the sale.”

The ratcheting up of sales targets began in 2009, he says, after the credit union brought in a new CEO from HSBC Bank, who then hired more people from HSBC and started to push the banking model of high sales targets.

  • Been wronged?  Contact Erica and the Go Public Team

“It went from giving good advice to getting clients in the door and pushing them into products,” he said.

“If I didn’t constantly push people into more debt, my manager would tell me, ‘You’re on the bus, or you’re flattening the tires.’ That was the attitude.”

Dozens of employees tell CBC’s Go Public they feel the same pressure as bank employees to meet high sales targets 2:03

‘I am concerned,’ CEO says

Coast Capital declined Go Public’s request to interview Don Coulter, who’s been CEO since 2014, saying his schedule was too full.

In a statement, Coulter said he’s concerned about the comments made to Go Public and will encourage all employees “to share their thoughts” with him directly.

He said the use of sales goals is “an important and a standard business practice” but employees are always asked to “do what is right for the member.”

There are more than 620 credit unions in Canada, and many are stand-alone financial institutions, so it’s difficult to determine how many are asking employees to meet sales targets.

Unlike banks, which are for-profit corporations, credit unions are owned by their members and aren’t beholden to the demands of shareholders or quarterly profits.

Members can elect the board of directors and collect a portion of a credit union’s earnings in the form of higher savings rates, lower loan rates or as a small annual deposit.

Canadian Credit Union Association CEO Martha Durdin says ‘there’s a difference between having targets and forcing people into things they don’t need.’ (Canadian Credit Union Association)

Canadian Credit Union Association president and CEO Martha Durdin said credit unions are motivated to serve their members.

“Unlike the banks, we’re not motivated to increase profits endlessly,” Durdin said.

She said profit margins for credit unions are low because unlike the banks, most credit unions can only operate within provincial borders — they don’t have the ability to make money internationally, for example.

“Having conversations about products … isn’t necessarily bad,” she said. “There’s a difference between having targets and forcing people into things they don’t need.”

For the most part, she said, “credit unions plow their profits back into the community.”

She declined to address concerns about sales targets that were raised in the emails Go Public received from credit union employees across the country.

‘How do you feel about selling?’

A former employee of Alberta’s Servus Credit Union, the country’s second largest, says she was recently fired because she couldn’t meet sales targets.

In her termination letter, Servus says it had “performance concerns.”

“If I didn’t try to upsell a member, my manager would ask, ‘How do you know you haven’t missed an opportunity?’

“We turned members into marks.”

april insights

As a member service supervisor, she conducted job interviews with potential tellers.

“Every interview, I had to ask ‘How do you feel about selling?'” she said. “And, ‘How do you feel about sales targets?’

“I had some staff say to me, ‘You’re just brainwashing people [about products].’ And all I could say to them was, ‘If we want to keep our jobs, this is what we have to do.'”

In a statement to Go Public, a Servus Credit Union spokesperson says the organization uses targets but “rejects any allegation that the organization puts profits before the financial needs of Servus members.” The statement says “employees are expected to always put member interests first.”

Employees at other credit unions claim the pressure to meet sales targets is so great they’ve experienced stress, anxiety, depression and gone on medical leave in some cases.

One employee described how working long hours to try to meet sales targets, including phoning members after closing to try to drum up business, makes him and his colleagues feel like “the walking dead.”

Must ‘watch their brand’

Sales targets at credit unions must be handled carefully, says Dionne Pohler, an assistant professor at the University of Toronto’s Centre for Industrial Relations and Human Resources.

“People assume that banks are maximizing profits and might have sales targets,” she said. “But people assume that credit unions are acting in the best interests of their members — not engaging in practices that would put their members at risk, or jeopardize their financial well-being.”

Credit union researcher Dionne Pohler says sales targets must be handled carefully at credit unions. (CBC )

Pohler, who recently wrote about the issue, says many credit unions are under pressure to generate enough revenue to compete with the banks — to merge and expand, and offer longer service hours and improved technology to members.

“They have to watch their brand,” she said. “If those sales targets aren’t coupled with co-operative norms and values, it can undermine member trust in a credit union.”

Largest credit union drops sales targets

Just as many credit unions appear to be implementing sales targets, Vancity, Canada’s largest credit union based on assets, decided to scrap them in late 2015.

No one from Vancity would give an interview to explain why sales targets were dropped, but a spokesperson said the credit union is moving away from a “branch-level model” to “focussing on goals for the organization.”

Vancity, Canada’s largest credit union, scrapped sales targets in late 2015. (Mike Zimmer, CBC )

In a statement to Go Public, William Azaroff, executive lead of member experience, wrote: “We believe in a culture that puts our members first and so we measure success based on the overall results of the credit union, which includes the well-being of our members and the communities where we live and work.”

Researcher Dionne Pohler says a key difference between banks and credit unions is that members who don’t think staff should be under pressure to meet sales targets can lobby for change.

“That’s the strength of the credit union,” she said. “Members can put pressure on the board to adopt the kinds of practices they would like to see adopted.”

CIBC financial adviser ‘stunned’ that federal investigation found bank customers not widely upsold

A CIBC financial adviser says she and her colleagues are “stunned” that a recent report by Canada’s banking regulator did not find widespread instances of customers who were upsold due to pressure on employees to meet sales targets.

“I can’t even explain to you how disheartened we all were,” says the financial adviser. CBC has confirmed her employment, but is not identifying the woman because she fears she would lose her job.

“We’ve been waiting for a year for this report,” she says. “It’s very hard, because it doesn’t feel accurate.”

The Financial Consumer Agency of Canada (FCAC) recently released the findings of a review of sales practices at the country’s six big banks. It was prompted by a series of Go Public investigations last year, revealing intense pressure on bank employees to sell customers products and services they may not need in order to meet sales targets.

Between May and November 2017, the FCAC interviewed more than 600 employees at BMO, CIBC, National Bank, RBC, Scotiabank and TD, reviewed 100,000 pages of bank documents and looked at more than 4,500 complaints.

The regulator found that the requirement for retail banking employees to sell products and services “can increase the risk of misselling and breaching market conduct obligations,” but also said it “did not find widespread misselling during its review.”

The CIBC employee says “there obviously wasn’t good enough research,” and that she is “doing daily harm to customers” because of her upselling.

Pressure ramped up

The financial adviser — and several employees from other banks who’ve contacted Go Public — say the pressure to sell initially eased up after media reports last year, but then gradually worsened.

“Sometimes two, three times a day, you’ll get an email wanting to know where are your sales numbers at? What have you sold today?” says the financial adviser. “Now that this [FCAC] report has come out, the [sales] pressure is 100 per cent full force. It’s every single day. ‘How many products did you sell?'”

She describes feeling “desperate” to meet sales targets — by doing everything from tacking on a savings account, to extending a customer’s line of credit, to putting customers into bank-owned investments [when another option might be more suitable].

“You’re saying to customers, ‘Let’s go over your finances. I’m here and I want to help,'” she says. “But what we’re doing is trying to find products you don’t have, that we can sell you.”

In order to find sales opportunities — or “gaps” — the financial adviser says they’re instructed to pull a customer’s credit profile, which can affect someone’s credit score.

“You don’t feel good. All the time,” she says. “You go home and you know that you told somebody that they needed to put their money into an investment because you had gaps that needed to be filled.”

In an email to Go Public, CIBC spokesperson Caroline Van Hasselt wrote: “The actions described are not representative of our culture, which is focused on putting our clients at the centre of all we do. At CIBC, we are committed to continuously reviewing our business to ensure we do what’s right for our clients every day.”

‘I feel very misled’

Michelle Bechthold of Airdrie, Alta., thinks she’s a victim of the upselling the FCAC says its review did not find to be a widespread problem. She has filed a complaint to the FCAC about a recent issue with her bank, which is now being investigated.

In December, Bechthold went to her local BMO branch and says the teller told her she “qualified for a complimentary upgrade” to her credit card.

“All she said was, ‘It’s so easy, and you’ll get all these [travel] points.'” says Bechthold.

Michelle Bechthold says a BMO teller ‘tricked’ her into getting a credit card with a higher interest rate. (Colin Hall/CBC)

But when the card arrived in the mail, instead of having a 13.9 per cent interest rate like her current credit card, it had an interest rate of 19.9 per cent, something Bechthold says the teller never mentioned.

“I would’ve never said, ‘Send it,'” she says. “That’s a six per cent increase on my interest rate. Are you kidding me? No way!”

After Bechthold complained several times, BMO apologized and gave her $150 compensation.

But she still doesn’t trust that another new card BMO sent her actually has her original interest rate of 13.9 per cent, and hasn’t activated it yet.

BMO did not respond to a request for comment from Go Public.

FCAC warns consumers

In an interview with Go Public, FCAC deputy commissioner Brigitte Goulard said she “can understand” why bank employees and customers might feel disappointed by the regulator’s report.

“The bank environment is a sales environment,” says Goulard. “If you’re not a salesperson, perhaps working in a bank is not for you … People [bank customers] need to know that the bank is not there to look after their interest.”

Goulard says the FCAC can’t address many of the concerns the public and bank employees have about selling products.

april insights

“Offering higher credit limits to Canadians or extending credit lines or offering more credit cards isn’t, per se, illegal,” says Goulard. “There are some questions about whether Canadians should have a third or fifth credit card. But that behaviour is not illegal.”

Goulard said the regulator’s investigation did reveal an unnamed number of instances of possible wrongdoing, and those cases are now being investigated, along with 4,500 other consumer complaints the agency received between April 2015 and May 2017.

The deputy commissioner says she encourages bank employees to contact the FCAC confidentially if they have concerns.

‘It’s disappointing’

Frank Allen of the Canadian Foundation for Advancement of Investor Rights says the FCAC review was too general — it didn’t name banks where problems were found, it recognized sales targets as being an issue but didn’t examine their impact, and made “vague recommendations” for banks to make improvements.

“It’s disappointing in the short term,” says Allen. “But hopefully in the long term, it will be a step that advances the interests of bank customers.”

Allen says the report is more fodder for calls for the banks to have a best interest standard, something FAIR Canada has long championed.

“It would require bank personnel to put the interests of the bank customer first,” says Allen. “Not just focusing on sales targets.”

CBA: Banks committed to high standards​

Go Public was contacted by the Canadian Bankers Association.

In a statement, CBA spokesperson Dave Bauer wrote that banks are committed to operating with high ethical standards, “which has been consistently neglected in Go Public’s reporting” and pointed to the fact that the FCAC’s review did not find widespread misselling.

“When mistakes happen, banks work diligently and quickly to make them right,” Bauer says.

‘At what cost to Canadians’

The CIBC financial adviser says she’ll try to focus on the 25 per cent of her job that is actually about helping customers with good financial advice.

“The bank should be a place you go to where you get the help, the support, the advice, and the products that you actually need,” she says. “I understand it’s a business. But to what end? And at what cost to Canadians?”

More controls needed on sale practices at big banks, financial watchdog says

Canada’s financial consumer watchdog says there are “insufficient” controls in place at the country’s biggest banks to prevent sales of financial products that are misrepresented or unsuitable for consumers, and the banks’ sales-focused culture elevates the risk that employees may flout consumer protection rules.

The Financial Consumer Agency of Canada (FCAC) released the findings Tuesday after completing a review of business practices at Canada’s Big Six banks. The review came in the wake of a series of CBC Go Public stories that highlighted allegations of questionable sales tactics as bank employees said they felt pressured to sell customers on unnecessary products and services.

The FCAC added it is investigating alleged breaches of rules of conduct — designed to protect consumers, and which banks are required to follow — that may have been identified during its review and will take action where appropriate.

“Banks are in the business of making money. We know that. But the way they sell financial products and manage employee performance, combined with how they set up their governance frameworks can lead to sales cultures that are not always aligned with consumers’ interests,” FCAC commissioner Lucie Tedesco said in a statement.

The review examined the Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce and National Bank of Canada.

The FCAC said it did not find widespread misselling, defined as selling products that are unsuitable or where the consumer is provided with incomplete or misleading information, at the banks.

However, it concluded that retail banking culture is predominantly focused on selling and rewards employees for doing so and that increases the risk that client interests are not always given the appropriate priority.

The agency also said the controls these banks have in place to mitigate the risks of misselling are “insufficient” and “underdeveloped,” particularly compared to the banks’ robust corporate governance policies.

‘Inadequate protection’

The Canadian Bankers Association said Canada’s banks are client-focused with a commitment to high ethical standards and complying with the law when providing products and services to help customers meet their financial goals.

“The six largest banks in Canada co-operated fully with FCAC and we are encouraged that the review found no widespread misselling and that banks get this right the vast majority of the time,” association president Neil Parmenter said in a statement.

The Canadian Foundation for the Advancement of Investor Rights and the Public Interest Advocacy Centre said the government should work toward having one national, statutory ombudservice for financial services complaints that can issue binding decisions.

Marian Passmore, director of policy at FAIR Canada, said the rules are inadequate.

“There is inadequate protection for Canadians at banks and reform is needed. FAIR Canada calls for a best interest standard so Canadians get the advice they expect and deserve,” Passmore said in a statement.

The review was launched last April after CBC News reported that some bank employees alleged they felt pressure to upsell, trick and even lie to customers to meet sales targets. The reports also prompted the House of Commons’ finance committee to hold a series of hearings examining the allegations last June.

The federal banking regulator, the Office of the Superintendent of Financial Institutions, also last summer said it was reviewing domestic retail sales practices at Canada’s key banks, focusing on “risk culture” and “the governance of sales practices.”

TD Bank, the focus of the initial CBC reports, has conducted its own internal review and concluded it did not have a widespread problem with aggressive sales tactics.

Meanwhile, banking-related complaints handled by an industry ombudsman last year surged by 28 per cent, with credit cards, mortgages and personal accounts drawing the most customer grievances.

Complaints hit five-year high

The Ombudsman for Banking Services and Investments (OBSI), which handles customer disputes for Scotiabank, CIBC and Bank of Montreal, said it opened 370 banking-related investigations in 2017 to handle customer disputes for its clients, compared with 290 a year ago. The dispute resolution firm said last year’s surge in new cases marks the highest level the industry ombudsman has seen in the past five years.

The FCAC said in its report Tuesday that the banks are in the process of enhancing their oversight and management of sales practices’ risk.

The watchdog also plans to “implement a modernized supervision framework that will allow the agency to proactively ensure banks have implemented the appropriate frameworks, policies, procedures and processes to mitigate sales practice risk.”

The FCAC will also increase its resources for supervisory and enforcement functions, it said.

The federal government said in its budget last month it would introduce legislation that “would strengthen the Financial Consumer Agency of Canada’s tools and mandate and continue to advance consumers’ rights and interests when dealing with their banks.”

‘We are all doing it’: Employees at Canada’s 5 big banks speak out about pressure to dupe customers

Employees from all five of Canada’s big banks have flooded Go Public with stories of how they feel pressured to upsell, trick and even lie to customers to meet unrealistic sales targets and keep their jobs.

The deluge is fuelling multiple calls for a parliamentary inquiry, even as the banks claim they’re acting in customers’ best interests.

In nearly 1,000 emails, employees from RBC, BMO, CIBC, TD and Scotiabank locations across Canada describe the pressures to hit targets that are monitored weekly, daily and in some cases hourly.

“Management is down your throat all the time,” said a Scotiabank financial adviser. “They want you to hit your numbers and it doesn’t matter how.”

CBC has agreed to protect their identities because the workers are concerned about current and future employment.

An RBC teller from Thunder Bay, Ont., said even when customers don’t need or want anything, “we need to upgrade their Visa card, increase their Visa limits or get them to open up a credit line.”

“It’s not what’s important to our clients anymore,” she said. “The bank wants more and more money. And it’s leading everyone into debt.”

A CIBC teller said, “I am expected to aggressively sell products, especially Visa. Hit those targets, who cares if it’s hurting customers.”

Former BMO employee speaks out

A financial services manager who left BMO in Calgary two months ago said he quit after having a full-blown panic attack in his branch manager’s office as she threatened to stifle his banking career because he hadn’t met sales targets.

“It was like the only thing they cared about at BMO,” he said. “If you weren’t selling, you weren’t worth having around.”

This former BMO financial services manager says his manager told him to lie to customers to improve sales revenue. (Colin Hall/CBC)

He claims his manager once told him not to tell clients who wanted to invest more than $40,000 that the markets were down, because putting their money into GICs wouldn’t earn the branch as much sales revenue.

He said she also told him to attach high interest rates on mortgages and lines of credit and to not tell clients those interest rates are negotiable.

He said he was “pressured to lie and cheat customers,” but refused to do it.

More than 1,000 emails

The revelations about other banks came pouring in after Go Public revealed last week that front-line staff at TD were under pressure to sell customers products and services they may not need and that some employees were breaking the law  to hit their sales revenue targets.

Those stories, experts say, prompted the largest drop in TD Bank shares since the financial market downturn of 2009.

We are straight up told to tell false stories (lie) to sell products. – TD insurance agent wrote in an email

They also resulted in hundreds more emails from TD workers past and present, including a teller who recently stopped working in Bramalea, Ont., who said the requirement to meet ever-increasing goals was so unprofessional, “I thought this was not a bank but a flea market.”

He admits to acting unethically because he says he feared being fired.

“I bumped up credit cards, overdraft or account types just because of the pressures.”

An Ontario-based TD insurance agent wrote, “We are straight up told to tell false stories (lie) to sell products.”

And an RBC financial adviser told Go Public, “We are all doing it.”

‘Shaming’ and ‘bullying’

Many bank employees described pressure tactics used by managers to try to increase sales.

An RBC certified financial planner in Guelph, Ont., said she’s been threatened with pay cuts and losing her job if she doesn’t upsell enough customers.

“Managers belittle you,” she said. “We get weekly emails that highlight in red the people who are not hitting those sales targets. It’s bullying.”

Some TD Bank employees told CBC’s Go Public they felt they had to break the law to keep their jobs. (Aaron Harris/Reuters)

Employees at several RBC branches in Calgary said there are white boards posted in the staff room that list which financial advisers are meeting their sales targets and which advisers are coming up short.

Similar white board results are reported at Scotiabank branches in Toronto.

“The entire team can see who is keeping them down. It’s shaming,” said a Scotiabank financial adviser who told Go Public she’s taking early retirement “because this environment is not for me.”

Stressed out

Some of the big five bank employees said they’re so stressed by expectations to hit sales targets, they’re on medical leave. Others said they had to quit.

They wrote about their jobs causing “insomnia,” “nausea,” “anxiety” and “depression.”

I went into a full-blown panic attack. -former  CIBC  small business associate

A CIBC small business associate who quit in January after nine years on the job said her district branch manager wasn’t pleased with her sales results when she was pregnant.

“She came into my office and decided to harass me. I went into a full-blown panic attack.”

She said the worst part of her job was having young families in her office who agreed to re-mortgage their homes because of debt.

“We told them we were helping them, but essentially we were extending more credit so the vicious cycle would … continue and we, in turn, would make a sale,” she said.

While working in Waterloo, Ont., she says her manager also instructed staff to tell all new international students looking to open a chequing account that they had to open a “student package,” which also included a savings account, credit card and overdraft.

“That is unfair and not the law, but we were told to do it for all of them.”

Big banks decline interview requests

Go Public requested interviews with the CEOs of the five big banks — BMO, CIBC, RBC, Scotiabank and TD — but all declined.

Instead, they sent statements, essentially saying the banks act in the best interest of their clients, and that employees are expected to follow codes of conduct.

The statements did not address employees’ concerns about high-pressure sales tactics.

Calls for parliamentary inquiry

NDP finance critic Alexandre Boulerice is now calling for a parliamentary inquiry into the sales practices of Canada’s banks.

“We expect banks to be honest with their clients … and now we are learning that those employees are under considerable pressure to sell, sell, sell to boost profits of the banks,” he said. “This is so greedy. It is not acceptable.”

Federal NDP finance critic Alexandre Boulerice wants a parliamentary inquiry. (CBC)

Stan Buell, founder of the Small Investor Protection Association, agrees it’s time for the federal government to take action.

“We’ve got a culture that exists on greed, lying and deceiving people, and it’s not going to end soon,” he said. “This is why the only solution really is to have government step in and look after the Canadian people. Because I feel the Canadian people deserve better than to serve as grist for the mill of these great financial organizations.”

Federal NDP finance critic Alexandre Boulerice wants a parliamentary inquiry. (CBC)

A spokesperson for Finance Minister Bill Morneau said the minister wasn’t available for an interview, but sent a statement that says Morneau “expects all financial institutions in Canada to adhere to the highest standards when it comes to their consumer protection obligations.”

Shareholders concerned

TD shareholder Allan Best says he’s concerned about more than the bank’s bottom line after last week’s stock dip, telling Go Public, “It is my position that employees are our most important asset and we have to do all we can to keep them in good mental and physical condition.”

The emails Go Public received from bank employees suggest not only have the sales targets increased dramatically in recent years, so has the pressure to meet them.

“I want the world to know how much pressure we are all under on a daily basis,” wrote an RBC teller in Ontario.

“We hit our target and the next week, they up them again. It’s out of control.”

Calls for parliamentary inquiry follow CBC’s Go Public investigation 2:03

Big banks under investigation by financial watchdog

A number of Canada’s big banks are under investigation for possible violations of the consumer rules that govern financial institutions, top officials from Canada’s financial consumer watchdog told members of Parliament Monday.

However, officials from the Financial Consumer Agency of Canada (FCAC) were tight-lipped, refusing to say which banks are being investigated or exactly which rules they are alleged to have broken.

In many cases, the results of investigations will remain a secret. Officials say the results of some investigations may become public and be published on the agency’s website. However, the agency has no plans to let complainants know if their complaints weren’t investigated, or if they were investigated and weren’t found to be grounded.

The FCAC’s investigations of possible violations by some banks is the latest development in a series of events that began when CBC’s Go Public revealed some bank employees were under intense pressure to sell customers products and services they might not need in order to meet sales targets.

That series of stories prompted the FCAC to conduct what FCAC Commissioner Lucie Tedesco told members of the House of Commons finance committee Monday was the “most significant” initiative in the agency’s history.

Over the course of nine months, the FCAC put the banking practices at BMO, CIBC, National Bank, RBC, Scotiabank and TD under a microscope. FCAC staff interviewed more than 600 employees and listened to hours of phone centre calls between bank employees and clients. It reviewed more than 100,000 pages of bank documents and reviewed 4,500 complaints.

‘Mis-selling’ financial products

In March, after nine months of study, the agency made public a 24-page report which concluded that the sales culture in Canada’s big banks increases the risk of “mis-selling” products —  selling customers products they don’t need or can’t afford, or selling them on the basis of incomplete, unclear or misleading information. The agency also said the steps banks have put in place to prevent that are insufficient.

However, the study also didn’t find evidence of widespread mis-selling by banks — a finding some bank employees have said is disheartening.

The FCAC’s report didn’t address alleged breaches of the consumer provisions of the Bank Act. “These allegations are being investigated on a separate track and FCAC will take enforcement action where appropriate,” the authors of the report wrote.

Tedesco said the agency is planning separate reports for each of the six banks outlining the agency’s findings.

“We will work to ensure that the necessary changes to mitigate the risks identified in the report are implemented.”

However, there are no plans to share those reports with the Canadian public.

Tedesco said the agency is increasing its supervision and doing risk profiles of each bank. Banks the agency believes are at greater risk of breaking the rules designed to protect consumers will face closer scrutiny, Tedesco told members of the committee.

The agency also plans to use ‘mystery shoppers’ — people hired to pose as consumers — to find out more about what is going on.

For us, they cross the line when they don’t obtain the consumer’s express consent to purchasing this product and they cross the line if they don’t provide the level of disclosure that is required by the regulation and the legislation – FCAC Commissioner Lucie Tedesco

At the same time, the federal government is working on an update to Canada’s consumer protection rules, Tedesco told the committee.

Meanwhile, potential cases of banks breaking the rules that were identified during the study are under investigation, she said.

“We will continue to investigate those potential violations of the consumer provisions under the Bank Act.”

Conservative MP Dan Albas questioned why the FCAC’s report didn’t include recommendations for concrete things the government could do to better protect bank customers.

“I have to say Ms. Tedesco, I’m a little disappointed in your report.”

Room for improvement

Tedesco suggested several changes that could be made, largely by the banks and FCAC — to the way they handle complaints, for example.

“Typically, they don’t capture first level complaints and … probably 95 per cent of complaints are resolved at the first level.”

Monitoring complaints at that first level can help banks identify emerging problems, Tedesco pointed out.

Among the products the FCAC has identified as “problematic” is creditor insurance marketed by banks, said Tedesco.

“This product might be good in some circumstances but it is often sold without the appropriate explanation as to how it works or its products and services, and sometimes people think they are getting it for free,” she said.

“For us, they cross the line when they don’t obtain the consumer’s express consent to purchasing this product and they cross the line if they don’t provide the level of disclosure that is required by the regulation and the legislation.”

Wayne Easter, chair of the House of Commons finance committee, said it is important for Canadians to feel the FCAC is looking out for the little guy – not the big banks. (Sean Kilpatrick/Canadian Press)

Richard Bilodeau, director of supervision and promotion for the agency, said the agency identified eight violations that resulted in three decisions by the commissioner adding up to $650,000 in fines in the past year. The decisions didn’t name the institutions involved.

Tedesco said the FCAC’s interventions have resulted in $21 million in reimbursements to bank customers over the past two years.

Liberal MP Wayne Easter, chairman of the committee, said it’s important that Canadians trust the FCAC to look out for their interests and “if there needs to be more authority in the legislation, we need to know that.

“If anyone in the public community starts to feel that the government or FCAC or any of the other regulators are not providing enough … protection for the little guy because it happens to be the big, powerful banks, then we’ve got a real problem and I think that’s where we are.”

Elizabeth Thompson can be reached at