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BIG FIVE BANKS employees speak out about deplorable sales tactics… and it’s gone viral!

A news story from CBC has gone viral.   The BANK employees are under tremendous pressure to sell YOU products.  They will say and do almost anything, according to the CBC news article.

For those of us working in Financial Services, this is old news.   Stories of high pressures sales and tied selling has been going on for over two decades.   Sales targets were introduced to the retail branch network in the ’90s.  It was the beginning of a new sales culture.  Prior to this, bank tellers and account managers had always worked with a ‘soft sell’ approach.  They were there to help and service your needs.  This was about to change forever.

Your bank teller is now scanning your financial profile to see if they can up sell you some bank product.   Last week, my son and I were in the TD Bank and they informed my son he was preapproved for a TD Visa card..  of course, there was a small annual fee… so we can add to the BANK’s $billion profits!

Now we are seeing Mobile Mortgage Reps working for Banks.  They come to your home or business.  They are paid on a commission basis.   Think about it. How can anyone expect them to be unbiased?   They can only sell you one brand and one range of products.  Are all mortgage products the same?   They can never truly provide neutral advice or recommend other brands.

It will be interesting to see if this issue gets swept under the rug or if it will become a big stink.  The BIG FIVE BANKS rank in the top EIGHT largest corporations in Canada.  And last year, RBC was the first Canadian corporation to report over $10billion in net profit.

Hmm, I wonder how they make all that money, year after year, after year, after year.

Your best interest is my only interest.   I reply to all questions and I welcome your comments.  Like this article?  Share with a friend.

Steve Garganis 416 224 0114

Bank Complaints on the rise and Mortgage penalties are a big reason

A report just came out from the Ombudsman for Banking Services and Investments that shows complaints are on the rise…

The report shows Bank complaints were up 21%.  Many of the complaints had to do with Mortgage Prepayment Penalties and rates on Lines of Credit….. This shouldn’t come as any surprise to anyone with a Bank Mortgage.

Last year was the start of record low interest rates… Mortgage rates were down below 4.00% for a 5 yr fixed and Variable rates were below 2.00%…  If you bought a new house or renewed your mortgage, it was great….you couldn’t have timed it better….

But what if you wanted to refinance your existing mortgage?  Could you do it?  If you were in a Variable rate mortgage, your penalty was probably 3 months interest or less…. That’s quite reasonable and manageable for most.. but if you were in a Fixed Rate Mortgage, then you were in for a surprise from the Big Banks… Enormous prepayment penalties….  Here are some real life examples… a $250k mortgage had a $13,000 penalty… a $275k mortgage had a $18,000 penalty

These penalties equaled 8 and 10 months of interest.…How can this be?  Well, the Banks changed how they calculate prepayment penalties about 10 years ago… To sum it up, you have to pay for any ‘discount’ off the posted rate.  And you have to pay for that discount in full.. for the entire duration of the mortgage….Not fair?  I agree.. extremely unfair…

Is there a connection with $billion Bank profits and these prepayment penalties?

If you are unsatisfied with a prepayment penalty then make some noise.. I encourage you to contact me or the Ombudsman for Banking Services and Investments .

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