On Friday, Canada’s Toronto-Dominion Bank stood by their business practices after a CBC News Report inclined that they had been putting their staff under pressure to meet sales targets, which were next to impossible.
Shares of the bank were 5.6% down on Friday ending at C$66.00. Their lowest in that session was C$65.83. The Canada benchmark stock index ended same as before.
The report by CBC news suggested that the customers of Toronto-Dominion were moved to accounts with higher fee or their credit card limits and overdraft limits were increased without the knowledge of the customers to help their staff meet the targets that were set.
In a statement from TD, the bank said that the media report describes a very much different and unreal environment as compared to the way they run their business and they don’t recognize the report from their own assessments, experience or perspective.
The targets for the sales have clearly been the talk of the day in the entire North American Continent since Wells Fargo (US-based bank) reached a settlement of $185 Million with the authorities of US last September due to the findings that their staff members opened up unauthorized accounts for the customers (about 2 Million) due to the pressure of sales goals.
John Aiken, an analyst at Barclays, said in a research note that was released this Friday that there is nothing that TD can do to disprove the allegations on them and the complete story is not likely to dissipate until an investigation takes place, which could be carried on for months.
The report by CBC has scared the traders because the misconduct allegations against the banks of Canada are very rare as they have avoided consumer scandals types that happened to lenders in the UK and the US.
In the statement by TD, they said that they had a culture of putting the customer needs first and they do so with integrity. This was reflected in their management practices performance.
The bank also said that they take their commitment to integrity and ethics seriously. Each and every company employee must abide by their Code of Ethics and Conduct, which clearly requires them to act with integrity and never allow business result focus to come before customer focus.
Canada’s banking regulator, OSFI (Office of Superintendent of Financial Institutions) said in a response for a comment that they were aware of the above mentioned issue and they won’t be discussing their supervisory work publicly.
The Canadian Consumer Watchdog, FCAC (Financial Consumer Agency of Canada), said in their response that they were also aware of these allegations of signing up their customers for services or products without providing each and everything related to the product and also about the product fees particularly.