Hidden cameras reveal how big banks are upselling you (Marketplace)

The pressure to sell. We are encouraged to push our goals above those of customers. Inside Canada's big

banks

. It is not a customer service or advisory environment. We go incognito to hear what they are promoting. And the promises made. Bad advice, at what price? Not only do they receive bad advice, but they also receive illegal advice. This is your Market. Minister Freeland, this is CBC Marketplace. We're looking forward to talking to you about a story we're doing on sales pressure at

banks

. ♪ -Hello guys. -Hello, Erica. We go incognito. And, of course, we'll have

hidden

cameras

recording.

Putting tellers at Canada's big five banks to the test. - - See what happens when we enter to make a simple deposit. - - We have listened to current and former employees of the big banks, who tell us that there are goals to achieve. It's a high-pressure sales environment. We had high expectations regarding sales quotas. We are encouraged to push our goals above those of customers. And we've heard from you about banks offering products you don't need or never applied for. I explicitly told them that I did not want any type of loan protection service offered to me.

It's like realizing that we had bank fees that were a little high. It was $9.95 a month for the bank account, and then through his MasterCard, we saw different numbers, ranging from $30 a month to $50 a month. $95 a month for a useless insurance policy has caused me quite a bit of pain. All this at a time when financial decisions really matter, and the big five made more than $50 billion last year. So are the banks really looking out for us or are they more interested in making a sale? To find out, we'll turn to BMO, CIBC, RBC, Scotiabank and TD.

Visit two branches in Toronto and Vancouver with our

hidden

cameras

recording to see for ourselves if they offer us products. Sandi Martin, an independent certified financial planner and former bank employee, will be watching. What is the objective of the bank employee? It is selling the products on the shelf, and making you feel good for having bought them. So it's just about sales? Yes. At RBC, our evaluator logs in and deposits $100. But then... Okay. And that's not all. So the damage is that you're treating a moment where someone assumes they're getting a service as an opportunity to get in there with a sale.

And I think that's kind of gross. If people have access to credit, how likely are they to use it? You may not realize how dangerous it is to have this. It can add up very quickly. There is no tone when we visit CIBC. But at BMO the story is different. After our tester deposited her cash, she launched a checking account. Not mentioned: If you don't keep $6,000, your account fees double. There was a lot of sales pressure in all aspects of the bank. That drive to increase sales is something this former BMO teller knows all too well.

Many people can't keep that balance above $6,000, so they are eventually charged for the premium plan. -The 30 dollars? -Yeah. I've seen it a lot. We are hiding his identity and someone else is reading his words, because he still works in the financial industry and is afraid that speaking out will cost him his job. Every week they would publish his results and show his name along with what he sold. Why do you think that email was sent? To embarrass you. You were afraid of losing your job. We obtained internal documents that show the sales credits BMO employees earn for selling things like checking accounts, credit cards, and lines of credit.

The more money the bank makes, the more credits the employee earns. I felt like I had to trick customers into getting them products they didn't need. What price did that cost you? It was very unethical and I felt like I was putting them in a worse position. And what's worse, he says his colleagues added products to customers' accounts without his knowledge. Many times, because they needed to meet their sales goals. Sounds familiar? Sign up clients or face dismissal. Seven years ago, my investigation with CBC's Go Public team

reveal

ed the immense pressure employees at all banks were under to sell.

There are already calls to better regulate financial securities. People selling products and services didn't just need to hit targets, sometimes even break the law, doing things like increasing credit card limits without permission. It's hard to trust them after seeing incidents like this. So has anything changed? In TD, while our tester is depositing his money... Oh! To qualify for a credit card, you don't even need an income check. The ideal situation is that a credit card is given to someone who then carries a balance on it and cannot pay it. But of course the bank wants to sell credit cards to people and of course the barrier to entry will be so low that it will reach the floor.

Nothing at Scotiabank. But at another BMO branch... Our evaluator was told she is eligible for a $25,000 line of credit. A line of credit with a slightly lower interest rate can really amplify the small amounts of overspending that add up over time and suddenly you have something that is incredibly difficult to pay off. Our hidden camera finds? It's no surprise to this former BMO employee. He recently resigned when the pressure to sell became too much. I said, "I feel like this is wrong." And what did she, your manager, say? She says: "All the banks do the same thing.

If we do it, at least we get the sales." And it's not just front-line tellers. If you sold, you know, a half-million-dollar mortgage, it would be worth half a million points. This former Scotiabank senior financial advisor says he was also pressured to sell. We are hiding his identity and someone else is reading his words. It is not a customer service or advisory environment. We are there to sell and make money for the bank. With so much at stake, is the advice better? So, Sandy, your head was literally in your hands. Oh, it's so bad. After this, we return to the banks. ♪ Get more Marketplace.

Subscribe to our weekly newsletter at CBC.ca/Marketplace. This is your Market. We're investigating the sales culture within Canada's big banks, visiting branches to listen to sales pitches and hidden cameras recording. We're also talking to current and former employees about the pressure to hit high sales goals. You have to sell something to that customer, even if they don't need it. Expensive products you don't need at a time when costs are piling up. -Do you feel the pinch? -Absolutely. Um, it's an extra, you know, $100 to $200 a week that we're looking at for a family of four, so. -At the supermarket. -Yes, in grocery stores.

My mortgage rates are constantly increasing and it is very difficult for my husband and I to make those payments. Many clients have cried and, you know, tell me their difficulties. Tough financial times: What this TD employee is hearing more and more. We are hiding his identity and using a different voice. He feels horrible. I shouldn't have to think more about my target than about the client's well-being and their interests. She says she has a big goal for selling investments, even when some clients say they have bills to pay. I've had an increase in clients who are upset, you know, about having to withdraw money from their children's RESPs.

If they need to take money, we have to do everything we can to stop it. So, to be clear, do you feel like you're under pressure to get clients to make financial decisions that may not be in their best interest? 100%. And, she says, there is proof. She secretly recorded a coaching session with her manager on how to pressure clients. Another person reads her words to protect the identity of the informant. I don't think she's counterproductive. I think I'm actually helping the client. It's disturbing because this is the corporation she works for and this is all driven by greed.

Hmm. It seems we need to investigate further. So, we head back inside the bank, this time to test what kind of financial advice we get from people beyond the tellers... Let's plug this one into your button, Kim. ...those trusted financial advisors and planners. Here we go. Now it's recording. Helping us, our colleague Kimberly. She goes incognito... If they ask you, you have some debt. Credit card debt. -About 17,000 dollars. -Well. ...telling her advisors that she wants to invest a $50,000 inheritance. Not true, but we are trying the advice we receive. First, what do advisors tell us to do about that credit card debt?

At Scotiabank... Yes. Just pay off a portion of that debt. Invest the rest. Bad advice, says certified financial planner Sandi Martin. There is no way you can earn 19.99% on your investment. It just won't happen. Of course, you should pay off your credit card debt. The advisor is not paid to settle the debt. -Can't you find any point of sale? No, I don't get any points for that. In TD... Minimum payment? At RBC, this advisor also tells us to pay a portion. Or he suggests taking out a line of credit to pay it off. Encouraging someone to pay off just a small portion of her debt and then moving it to get a little less, such as a lower interest rate, is still bad advice.

Regarding that inheritance, all advisors recommend investing in mutual funds that allow them to obtain credits for sales. They are not allowed to guarantee the return on those investments, will they do that too? At CIBC, it seems like it's a sure thing. Good. Absolutely guarantee more than 10%. Can you do that? No. Oh no. He absolutely and unequivocally cannot guarantee any mutual fund number. And there is more. Financial advisors tell us that they felt like they sometimes had to cross the line just to sell those investments. The TD source recorded another manager telling him to snoop through a client's accounts.

His words are read by another person. A lot of money that could be used for a product that the bank wants to sell. TD tells us that the recorded conversations are completely unacceptable and do not comply with their code of conduct. As for the former Scotiabank advisor, his breaking point? The death of a client's husband. I mentioned this to my direct supervisor and the first question he asked me was, "Are we still receiving your investments?" That was the first thing that mattered to him. That's when I really realized that... there is no compassion whatsoever. Uh, it's all about numbers.

How do those numbers reflect when it comes to investments? Back on hidden camera, we asked about the fees charged to those mutual funds. They're important, because a typical 2.5% fee could eat up almost half the value of your portfolio over 25 years. So, our final check: What will advisors who have to sell mutual funds to hit targets tell us about fees? At BMO... The advisor incorrectly says that fees are only charged on any earnings generated by a $50,000 inheritance, not on the savings themselves. At TD, they tell us not to worry about rates. We are also told, incorrectly, that they are only charged on profits.

Or... RBC is right, he says the fees apply to the entire investment, but claims they aren't a big deal. Good. I see. Well. At Scotia, the advisor claims he doesn't know how the fees work. So, Sandi, your head was literally in your hands. Oh, it's so bad. And... I really think those frontline advisors don't know the answer. -They are guessing. -They are authorized mutual fund agents. Oh, that bar is so low. In all, only one advisor provides clear and correct information about mutual fund fees. Do you think the pressure to sell products was behind some of the advice we received?

I think almost all of the advice he received was heavily influenced by the pressure to sell financial products. Hi Duff, CBC's Erica Johnson. Duff Conacher is a consumer advocate who has watched banks for decades. Your opinion of him on what we've seen? Not only do they receive bad advice, but they also receive illegal advice. He is referring to clauses in the Banking Law that require banks not to take advantage of customers and offer adequate products and services. So what we document, you say, is a violation of the law? Yes. Yes, I believe very clearly that the advice given violates the Banking Law's duty for banks to act in the financial interests of their customers.

All five banks declined our interview request and referred us to the Canadian Bankers Association. In a statement, he says: "Our findings do not reflect the experience that millions of Canadians have in banks every day." They add that a more formal analysis of the client's needs is expected to be carried out when moving from an initial conversation to establishing an investment. ♪ So if the big banks don't care about the little ones, who does? The agency just needs to follow the basics of law enforcement 101. Perhaps the Minister of Finance can brief us, after the break. Do you have a story you think Marketplace should investigate?

Contactus at [email protected]. This is your Market. From the misleading... ...to the downright wrong. Duff Conacher says the bank's regulator is releasing them. The agency only needs to follow Law 101, which means you conduct regular, unannounced inspections. When violations are detected, the penalties must be high enough to eliminate any benefits the bank has gained from violating the law. The Financial Consumer Agency of Canada will not speak on camera. In a statement, he says he is concerned about banks' sales practices and takes the matter very seriously. He added: "Banks should only sell products to consumers if it is appropriate and should ensure that employees have the skills to fulfill that responsibility." Ultimately, the responsibility lies with Finance Minister Chrystia Freeland.

For weeks we have requested an interview, but her office says no. We found out that she will be attending this mining conference in Toronto. So, we tried again in person. Minister Freeland, this is CBC Marketplace. We hope to talk to you about a story we are doing on sales pressure within banks. We keep trying. Minister Freeland, do you have a moment to speak with CBC Marketplace? Sorry, we're just running towards... apologies. We have been documenting sales pressures at banks. We found that bank employers were giving inaccurate advice. But no luck. Later, her office sends a statement saying the government has zero tolerance for banks that offer misleading information or inappropriate financial services.

And they say they have taken action and added consumer protections to the Banking Law. Hmm... Those wards were in place during our hidden camera test. So until consumers are better protected, our expert has this message: just do a little research on the evidence for good, sound financial advice, and then you'll hear these pitches with very different ears. That's what I want people to do.