The Financial Consumer Agency of Canada (FCAC) is kicking off its next reviews into the banking industry’s business practices in April amid allegations from Toronto-Dominion Bank (TD) employees of selling products and services to clients without their express consent or against their interests as a result of pressures to hit certain sales thresholds.
The consumer watchdog routinely performs reviews of the practices of federally regulated financial institutions to investigate specific compliance issues, and it will focus on the recent claims in the next round of reviews.
“The law requires that, in order to provide consumers with new or expanded products or increase their credit limits, financial institutions obtain their customers’ prior consent and disclose key information about the costs and charges of the products they’re purchasing,” says Lucie Tedesco, FCAC commissioner, in a statement.
Specifically, the April review will investigate banks’ policies and practices on express consent and disclosure, and whether there are appropriate safeguards in place from the top down to prevent misconduct.
In addition, it will seek to identify any factors that could be impacting bank employees’ ability to comply with the regulations.
“Financial institutions’ compliance with these rules is non-discretionary and the message must be disseminated from the boards of directors on down to customer-facing staff,” Tedesco says.
Once completed, the FCAC’s reviews, which are often used to examine emerging industry issues and concerns, may lead to enforcement actions.
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