Bank bashing

Canada's Big Five banks are racking up record profits, so I guess it's no surprise that there's a ready market for stories suggesting they're doing so by nefarious means.  Step forward the public broadcaster, CBC, which began last week by calling out my former firm, Toronto-Dominion, but is now widening the net to include all of the banks.  It seems there are plenty of whistleblowers among the employees of each bank willing to tell tales (anonymously, of course) to the CBC.

All of the stories basically say the same thing: bank counter staff and others are under ever-increasing pressure to boost revenues by selling things to customers that they didn't ask for, don't need or can't afford.  I have to say that some of the commonly-cited examples make no sense to me.  Supposedly, bank staff increase a lot of people's credit card or overdraft limits without asking them first.  How exactly does this hurt the customer?  My credit card fee is not affected by my credit card limit, and a higher credit card limit only affects me if I actually use it.  You could also ask, by the way, how raising such limits without the customer's knowledge helps the bank, but I'd have to leave it to the bank to answer that, as I can't figure it out.

I'm ten years retired from TD and was never involved in the retail side of things, so I have no real direct knowledge of that business.  I did touch base with a fellow retiree who is in a position to know, and was told that the number of customer complaints about aggressive selling is extremely small.  Moreover, bank front-line staff are judged not only on their sales success but also on their customer satisfaction rankings, so excessive aggression would almost certainly be counterproductive.

My own local TD branch shows no signs of the kind of behaviour that CBC is talking about here; maybe that's a benefit of living in a smaller community.  In any case, I'm wondering whether the people complaining about bank selling practices have had any dealings recently with a car dealership, or an appliance store, or an insurance agent, all of which have a well-documented history of pressure tactics -- remember William H. Macy's car salesman in "Fargo"?

All of that said, the bank staff coming forward to tell tales to the CBC do seem to have one common complaint: they're under increasing pressure to produce revenues, and fear losing their jobs if they don't succeed.  This is, perhaps, a clue to the whole story.  Bricks-and-mortar banking is being increasingly supplanted by the internet, even for quite complex transactions.  Branch staff are surely aware of this, and aware that banks are quietly closing money-losing locations all across the country. Those fears of losing their jobs are very likely well-founded, whether they resort to dodgy sales techniques or not.

TD and all of the other banks have responded to the CBC stories by stressing that all of their staff are expected to abide by a code of conduct.  However, the Financial Consumer Agency of Canada (which I confess I had never heard of before) has now announced an investigation, starting next month, and politicians are demanding action.  Bank-bashing season may well last all year long.