OTTAWA (CU)_Back in 2019, the Financial Consumer Agency of Canada (FCAC) conducted a mystery shopping review at six of the country’s largest banks, namely Bank of Montreal, Canadian Imperial Bank of Commerce, Royal Bank of Canada, National Bank of Canada, Toronto-Dominion Bank and Bank of Nova Scotia. The review involved the use of semi-scripted scenarios by a mystery shopping firm from which individuals posed as customers and talk with employees at 712 bank branches across the Canada. The federal consumer watchdog published a report on its findings last week, which shed light on what consumers may experience when shopping for financial products and services, particularly Indigenous and visible minority customers.
According to the report, it has been revealed that shoppers of various demographics do not enjoy similar sales experiences at Canada’s big banks, with visible minorities and/or Indigenous persons receiving inappropriate treatment from sales staff. FCAC said product recommendations made by bank staff were not appropriate for their needs, compared with shoppers who do not belong to this demographic group.
They also reported that “information was not presented in a clear and simple manner”, while they were pitched more heavily on optional products, like overdraft protection and balance protection insurance. One in three Indigenous, visible minority customers were offered the former service, which guarantees that charges to a debit account will clear even if the balance falls below zero, although it often involves heavy fees and interest. They were also three times more likely to be offered balance protection insurance, the FCAC reported.
The federal agency’s findings also highlighted concerning sales practices experienced by students and younger shoppers, compared to customers outside these demographic groups. “These findings indicate that banks can do more to ensure that the demographic groups at higher risk are protected from experiencing concerning sales practices,” the FCAC said.
