OTTAWA — Federal MPs are hearing testimony from former bank employees today as they explore allegations of questionable, and even illegal, sales practices by some of the country’s largest financial institutions.
The committee hearings follow CBC reports about employees at some big banks who were allegedly pressured to sell unnecessary products and services in order to increase profits and meet lofty sales targets.
The committee will hear from former bank employee Larry Elford, who alleges that most banking clients who seek the advice of a financial professional are surreptitiously directed to a salesperson instead.
Elford says one of his former employers chose to pursue a path to higher profits instead of following industry rules for fairness and dealing in good faith.
He is also calling into question the work of regulators that are mandated to protect Canadians from financial harm at the hands of the industry.
Earlier this week, the committee heard from Financial Consumer Agency of Canada commissioner Lucie Tedesco, who says a review of bank business practices is underway, with initial findings due by the end of the year.
Tedesco says her agency will investigate any suspected breaches and pursue enforcement action, if necessary.
The big banks have defended their practices and insist they put the needs of their clients first, regularly seek employee and customer feedback and address any inappropriate behaviour.
Darren Hannah of the Canadian Bankers Association has already told the committee that a key element of customer satisfaction is how banks respond to complaints, and that the association’s members co-operate with regulators.
Next week, the committee is scheduled to hear from bank officials.