by CBC News: The National
10/10/22
Canada’s big banks made bundles off balance protection insurance. A product the governments own financial watchdog calls high risk for consumers, problematic, and often sold without appropriate explanation.
John Lawford (Public Interest Advocacy Centre);
It’s expensive, it doesn’t cover a lot of situations and it pays out a very small amount most of the time.
CBC Reporter;
Then why are the banks selling it?
John Lawford;
It’s pure profit.
CBC Reporter;
To see just how they are selling it we asked Haider Ameen to wear a hidden camera and hear the sales pitch. Sometimes bank employees couldn’t even explain the insurance, other times they were inaccurate .
Bank Employee;
Say your were using your card you had five thousand dollars on it and you lost your job like Scotiabank would pay off your credit card.
CBC Reporter;
That’s not exactly true this insurance typically only covers the minimum payment or a small part of your balance. Even then many don’t ever collect including Haider Ameen even when his job ended.
Haider Ameen;
I felt like they were taking advantage of me of a student. They didn’t explain things for me enough to know more about balance protection.
CBC Reporter;
Bank insiders told us they sometimes mislead customers to make a sale and a commission. Some customers told us they ended up paying premiums they never asked for “without my permission without my knowledge, I didn’t ask for it”.
Canada’s big banks say they take customer concerns seriously and the insurance is to help customers. But in the US, UK and Australia some banks have stopped selling the insurance after they were fined billions for misleading consumers including over similar practices on credit card protection insurance.
There have been warnings in Canada but no similar crackdown. Instead customers like Haider Ameen are trying to get the money they paid back.
Still Have Questions?
We have insurance experts available to answer all your questions.