Ottawa has launched an investigation into the business practices of Canada’s financial institutions after allegations that big banks have been pressuring and even “tricking” customers into buying their products and services.

The Financial Consumer Agency of Canada — an independent government agency that enforces consumer protection legislation — announced Wednesday that it will launch a review of business practices in the federally-regulated financial sector in April.

In a statement, FCAC commissioner Lucie Tedesco expressed concern with recent allegations related to the sale of products and services by financial institutions to consumers without properly obtaining their prior express consent.

“The law requires that, in order to provide consumers with new or expanded products or increase their credit limits, financial institutions obtain their customers’ prior consent and disclose key information about the costs and charges of the products they are purchasing,” she said.

“Financial institutions’ compliance with these rules is non-discretionary and the message must be disseminated from the boards of directors on down to customer-facing staff,” Tedesco said.

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The CBC recently reported that it’s been flooded with stories from employees of all five of Canada’s big banks about “how they feel pressured to upsell, trick and even lie to customers to meet unrealistic sales targets and keep their jobs.”

The news has fuelled calls for a parliamentary inquiry. The banks have responded in recent statements that they are acting in the best interests of their customers.

The banks look forward to co-operating with the agency’s review, said Terry Campbell, president of the Canadian Bankers Association.

“As we have with previous reviews, Canada’s banks will co-operate fully and constructively with the regulator,” he said in a statement Wednesday.

“We are confident that the banks’ strong policies, procedures, and controls are functioning well,” he said. “Canadians are well-served by their banks.”

In the first CBC program on the issue aired last week, three TD employees spoke out about feeling “incredible pressure” to meet “unrealistic” sales targets by signing customers up for unnecessary financial products.

“TD Bank Group does not believe certain recent media coverage is an accurate portrayal of our culture, or that it reflects the experience of most of our colleagues, but we take the concerns very seriously,” the bank said in a statement Monday.

CBC followed with another story after it received almost 1,000 emails from employees of the five banks across the country that described “the pressures to hit targets that are monitored weekly, daily and in some cases hourly,” according to an article on the network’s website.

Tedesco noted “these issues have been discussed in my recent meetings with the CEOs and boards of Canada’s leading banks.”

“In addition, in a recent address to their compliance professionals and in an industry-wide letter, I expressed my expectation that banks and other financial institutions be proactive in scrutinizing the effectiveness of their policies, procedures and practices to ensure that consumers are protected,” she added.

Edward Jones analyst Jim Shanahan likened the situation to similar allegations facing Wells Fargo last year. In that case, the U.S. bank issued an apology and paid large penalties after regulators concluded that its employees had opened millions of unauthorized accounts and credit cards on behalf of clients.

“I can’t remember ever hearing of anything of this magnitude happening in Canada,” Shanahan told The Canadian Press. “It hasn’t reached scandal proportions yet, but it’s certainly blowing up.”

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Shanahan said banks are feeling intense pressure from investors to continue growing their earnings and profitability in spite of headwinds such as rock bottom interest rates and higher capital requirements. That pressure trickles down to executives and, ultimately, customer-facing sales representatives, Shanahan said.

“I don’t think we’ve heard the worst of this yet. This is going to probably get a lot worse before it gets better.”

In a statement earlier this week, Scotiabank said “tellers do not have sales targets and branch advisers provide customers balanced advice based on their needs. We monitor and enhance sales practices and process on an ongoing basis.”