Never forget that the big banks are in business to make money for their shareholders. Serving customers is always going to be a lower priority than boosting the bottom line, despite what their ads say.
No matter what kind of help you seek from a bank, you can be tricked and deceived if you start with the idea that the bank is your friend. It’s not on your side. The overriding goal is to make profits for shareholders.
Canadians trust the banks too much. We think we will get objective help, not tainted by bias or financial incentives. That’s far from the case.
For example, banks push you to buy expensive insurance that covers minimum payments on your credit card if you’re sick or injured. They may enroll you in a plan without authorization when you get a credit card, then put the onus on you to opt out.
When you take out a mortgage, banks often link their life insurance to the application. They don’t tell you that life insurance is optional and is available at much better terms outside the bank.
And why are banks always keen to extend credit so you can contribute to an RRSP or catch up on previous RRSP contributions? If they had your best interests at heart, wouldn’t they tell you that the best investment is to cut down your debt, especially in the early years of a mortgage when interest costs are highest?
Last year, I got more complaints about banks than in the previous five years. They came from people surprised to find the base rate on their lines of credit going up at a time when the Bank of Canada rate was coming down — and from those shocked at the size of their penalties when they renegotiated a mortgage.
Check the complaint from Sarah below, who renewed her mortgage when the bank approached her and had no idea that she’d be zapped with a huge fee. The friendly banker never mentioned it. In fact, she was assured that she could do this transaction without any consequences.