Banks defraud average Canadians – what makes this so outrageous?

With a gun you can rob a bank, but with a bank you can rob the world.  Over the years we have seen our banks act vicariously through that aphorism, and the recent revelations by CBC are certainly upsetting, yet at the same time unsurprising.

These findings have revealed how bank managers are forcing their workers to gouge customers in order to meet unrealistic sales targets, which were likely requested from higher-level executives.

It’s appropriate to add that RBC made a 3 billion dollar profit during its last quarter, yet it seems this absurd amount of money is not enough to satiate the voracious appetite of these unapologetic oligarchs, so apparently, it is found necessary to extract every last dollar from every possible avenue, which includes wringing dry the remaining funds of our beguiled working-class Canadians.

Employees are pressured (to the brink of depression) into upselling customers and tacking on unnecessary fees.

This story came about once it was revealed that TD bank demanded their workers to mislead and employ unethical tactics in order to meet lofty sales goals.  Once the article was released, many anonymous e-mails were later sent to CBC which revealed these tactics were prevalent amongst all of Canada’s big five banks.

In order to meet said sales targets, employees were forced to resort to shady tactics.  This includes surreptitiously upgrading banking accounts of unwitting customers, resulting in higher monthly fees. Credit limits and other unnecessary service fees were unwittingly increased on trusting elders and veterans for the bank’s own hedonistic gains.

Bank workers also admitted to arbitrarily pressuring families to take out home equity loans in order to relieve themselves of debt.  Instead of providing prudent financial advice,  workers, in order to meet sales goals, lock Canadians into perpetual debt payments and provide other shoddy advice.

Managers also imposed “student packages” amongst students who simply wanted to open a chequing account. They misleadingly opened credit cards and savings accounts burdening them with unnecessary additional fees.

This type of nefarious behaviour is not unlike the Wells Fargo scandal, where witting employees illegally signed customers up for unauthorized accounts and credit cards.  The difference lies between the fact that workers at Wells Fargo actually went to the extent of signing people up for accounts, posing as if they were actually the customer who was doing so. It has not been revealed our banks have committed this outright fraudulent behaviour, yet it is still uncertain if they have done so,  as our financial regulator has failed to commit any sort of investigation surrounding these activities.

The horrifying fact of this whole story is that banks are making obscene profits off a system rigged in their favour, yet Canadians struggling to make a dollar, are the ones who are paying for their honest living.

Simply said, banks are profiting off a rigged system, and many are unaware how.

Our banks have the ability to create money when they make loans.  For example, if you agree to terms with a bank of say a mortgage of $500,000, all the bank does is type in a few numbers in their system, which then proceeds to credit your account with $500,000.  This new amount of money did not exist prior to the loan being made.

So banks have the ability to create money and when doing so, they collect large amounts of interest – like a 5% rate on a 25 year amortization period.  Indeed, they are making money off essentially doing nothing.  The only risk they take however, is if the person defaults, then the bank is forced to pay for the remaining amount out of its own shareholders equity.

Yet, (and when I say yet, it is a big yet) our banks do not take any risk from a lot of these mortgages lent out, as for all mortgages that are insured (around 50% of all mortgages are insured, any mortgage with a down payment less or equal to 20% is forced to take out insurance on a mortgage) the CMHC, a government agency, is on the hook to cover any losses should these insured borrowers end up defaulting on the loan.  Therefore the bank is not taking any risk when making these mortgage loans, unfairly making an absurd profit for absolutely no reason, aside from them simply being banks. This is arguably one of the biggest financial schemes of our time.

Don’t forget that through personal, commercial and syndicate loans, the banks still have the ability to create this money when providing the loan and they end up profiting off the interest.

Banks also employ ridiculously high credit card rates at 19.99% monthly. Since many people are on the hook for mortgage payments, lots of their capital is tied up, forcing them to take out credit cards in order to pay for household necessities.

Students are also locked into financial prison through their student loans, as they are faced with exorbitant debt.

Many people also invest through financial advisors employed by banks, who then invest in mutual funds, where they generally receive around a 3% commission on the yearly return.

There are other ways banks make money, however it is superfluous at this point to list them all. Indeed, people are already being ripped off through debt enslavement, yet it seems this is not enough for these greedy banks.

Even through the advantages afforded to our banking system, it is still found necessary to rip off and defraud hardworking Canadians.

We urgently need to put a stop to this behaviour.  If banks have no problem defrauding average Canadians, than who knows what other nefarious activities go on behind closed doors.

It’s past time to hold these banks accountable for their actions.  Our banking system is robbing the Canadian people dry.

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About Jake Beaumont 41 Articles
BA in Media Studies from the University of Guelph. Graduated from the University of Guelph-Humber with a Diploma in Journalism. Former Research Analyst for Honest Reporting Canada. Published in the Huffington Post, Vancouver Province and many other newspapers across Canada. Specializes in Middle-East politics. Currently situated in Toronto.

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