A new investigation launched by the Financial Consumer Agency of Canada (FCAC) into the sales practices of Canadian banks could end up revealing possible breaches of federal regulations.
But any penalties imposed on offending parties would only amount to a maximum $500,000.
“If we do find through the review that there’s a potential breach of their obligations, obviously we immediately investigate,” FCAC Deputy Commissioner Brigitte Goulard told BNN in an interview on Wednesday. “We determine whether or not there’s been negligence, whether or not they’ve been complying and following the investigation a penalty can be imposed, up to $500,000 and we can also potentially name the institution if the harm is fairly egregious.”
The FCAC announced its latest investigation on Wednesday, just under a week after a CBC report, citing anonymous sources, claimed that TD Bank employees had engaged in illegal activities to hit sales targets. The report alleged TD employees hiked credit card limits, raised overdraft limits and moved clients to higher-fee accounts, all without customer permission.
Goulard said the FCAC had already been planning an investigation since Wells Fargo came under investigation for its own sales practices in November, but the recent reports in Canada sped up its launch.
“As soon as the Wells Fargo issue hit the papers in the States, we obviously turned out attention in Canada to make sure that things were under control and we had not seen an uptick in the number of complaints that we’re getting on these particular issues,” she added.
“A few – I guess about two – months ago we started hearing potential issues and sent a letter out to all of the regulated financial institutions reminding them of our expectations that they do need to comply with their obligations, and we are currently following up with the financial institutions [on] what they have done to comply.”
While the FCAC keeps a close eye on the institutions themselves, Goulard said that customers themselves have to be mindful of treating bank products the same way they would any other consumer purchase.
“There’s always a role for the consumer,” she said. “The consumer needs to be aware that when they sit down with a bank staff that they are there to potentially purchase a product and, like any other customer, whether you’re getting a credit card or purchasing a washing machine, you should have some idea of what you’re looking for and the terms and conditions under which you’re prepared to accept the product.”