RBC agent pushes useless checking account to client and comments on his accent
Hardik Patel knew something was wrong when a Royal Bank customer service agent told him there was only one way to access his RRSP account online: he would have to open a chequing account, with monthly fees.
He knew that wasn’t true. Patel, who immigrated to Toronto from India four years ago, had already accessed his RRSP several times.
Frustrated that he was being sold a product he didn’t need, he asked to speak to a manager.
Patel wanted assurances that RBC staff would not try to sell someone else and also took issue with a remark the agent made about his accent.
“They were pushing me to buy something I didn’t need,” he told Go Public.
Patel’s experience mirrors some findings from a recent Financial Consumer Agency of Canada (FCAC) report that suggests racialized bank customers are offered inappropriate financial products more often than other customers.
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The report was prompted in part by a Go Public investigation into high-pressure sales tactics within big banks.
Five years ago, following a story featuring three TD Bank employees speaking out about what they considered unethical sales pressure, more than 3,000 current and former employees of Canada’s largest banks told Go Public they too are under immense pressure to sell products and services that people don’t need and often can’t afford.
They described feeling desperate to meet ever-increasing sales targets and being pressured to increase customers’ lines of credit, push credit cards with high annual fees and secretly open accounts. checks for customers, among others.
FCAC conducted a national review in 2018, which found that a focus on sales targets increased the risk that banks put sales ahead of customer interests.
He then hired a private company to send mystery shoppers to 712 branches of the six major banks in each province by the end of 2019.
The resulting report says they tested how front-line employees at Bank of Montreal, CIBC, Scotiabank, National, TD Bank and RBC sell products and services. , and found “worrying” experiences involving inappropriate recommendations, unhelpful product presentations, and confusing communication.
“The mystery shopping exercise revealed sales experiences that cause concern,” FCAC commissioner Judith Robertson said in a news release.
A business and economics expert says she is encouraged that the banking watchdog has detected these red flags.
“They have every right to be concerned about this type of sales culture,” said Caroline Shenaz Hossein, associate professor of global development at the University of Toronto Scarborough.
The report also states that undercover shoppers who identified as racialized or Indigenous were offered inappropriate financial products more often than other customers and were subjected to unsolicited product introductions.
“It’s not a shocking surprise to anyone who has been following the news,” Shenaz Hossein said.
“There is … systemic racism happening in Canada’s commercial banking system.”
Push ‘premium’ credit cards
During Go Public’s 2017 investigation, all major banks repeatedly denied using high-pressure sales tactics and said customers always came first.
But the mystery shopper survey found nearly a third of all credit card referrals were for “premium” credit cards – which often have high annual fees and typically require a minimum individual or family income.
Yet in 80% of cases, bank staff promoting it never asked shoppers what their income was.
Questions about drinking habits were also rare. According to the report, only 16% of employees who recommended a premium card asked about a shopper’s spending habits.
According to Shenaz Hossein, that’s because those details would affect an employee’s ability to drive a sale, if they discovered that the individual is not a good candidate for the product.
“Once they borrow that line, they have an obligation not to carry those product lines,” she said.
FCAC says in the report that banks “have a responsibility to ensure that front-line staff…make recommendations that meet consumer needs.”
Sales targets and incentives “shouldn’t conflict with these targets,” he said.
‘Sell, sell, sell’
Undercover buyers who identified as racialized or Indigenous were offered overdraft protection, which involves a monthly fee and earns interest, at a rate almost twice that of other buyers.
They were also more than three times more likely to be offered balance protection insurance – which covers the minimum monthly payment on a card’s outstanding balance, but comes with high fees and so many exclusions that t is often difficult to make a claim.
Bank employees “assume that black people, racialized people and Indigenous people are more likely to fall short or overreach,” Shenaz Hossein said.
The regulator also found the findings troubling, saying in the report that “banks can do more to ensure that the most at-risk demographics are protected from selling practices.”
The report also says banks have a responsibility “to ensure front-line staff are effectively trained,” citing instances where employees lacked the knowledge to deal with buyers.
Shenaz Hossein says that puts the blame on the staff.
“What [the FCAC] should think is…why is there so much pressure for them to sell, sell, sell, that it actually undermines the integrity of the bank and its commitment to caring for the financial health of Canadians? “said Shenaz Hossein.
It studies and advocates banking alternatives such as credit unions, which are owned by their members and not mandated to make a profit.
The findings also came as no surprise to Duff Conacher, co-founder of Democracy Watch, a nonprofit citizen advocacy organization that focuses on government and corporate accountability.
“The ACFC could have discovered [racial discrimination] 20 years ago if they had done a mystery shopper survey,” he said.
He notes that US banks have tracked racial discrimination for years.
“For 40 years they have required banks to track and disclose their service and investment lending records by race, gender, income level and neighborhood, and disclose the data, which proves discrimination over and over again. “, did he declare.
“They are required to take corrective action. And we [Canada] are decades behind.”
The Canadian Bankers Association did not respond to Go Public’s questions about the survey results, but in a statement the banks have “a deep commitment to high ethical standards” and have worked hard to earn trust millions of Canadians.
Agent remark “inappropriate”
Patel escalated his complaint to RBC, which confirmed in a letter that he should not have been told he needed to open a new checking account and that “appropriate coaching” had since taken place.
“I think they should have said more about what they will do to prevent this from happening to anyone else,” Patel said.
The letter also said that management had reviewed his call with customer service and determined that the agent’s comment about Patel’s accent “was inappropriate.”
RBC said it regretted the incident and that “appropriate steps” had been taken to prevent anything similar in the future – but did not elaborate on those steps.
“What [the RBC agent] said was racist,” Patel said. “I want this to stop. So tell me what steps you’re going to take to make sure more people aren’t treated this way.”
Dissatisfied, Patel filed a complaint with the Human Rights Commission. Last month, he and RBC reached a settlement before his case was heard.
He is not authorized to discuss details or comment on what happened, as the bank demanded that he sign a non-disclosure agreement.
In a recent statement to Go Public, an RBC spokesperson said: “Discrimination – in any form – goes against everything we stand for and is not tolerated.
He also said the bank continues to provide training to employees “to deepen awareness of the concepts of diversity, bias and racism.”
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