Identify concerns over privacy of information and sales pressure
February 15, 2006, Toronto, ON – Survey results released today by Advocis, The Financial Advisors Association of Canada, suggest that Canadians are wary of removing restrictions on bank expansion into the area of marketing and selling life and health insurance from bank branches. According to the survey, conducted by POLLARA Inc., consumers said that they neither need nor want bank growth into an area in which they already feel well served, noting that they have serious concerns over the power banks could have if the current restrictions on life and health insurance networking are removed.
�The results were most telling on the issue of privacy,� noted Steve Howard, Advocis President and CEO. Ninety-one per cent of Canadians indicated that they believe banks already have enough, or more than enough, personal information about them.
Mr. Howard went on to say, �Canadians are concerned about the prospect of banks having their banking and personal and health information at the same bank branch. In particular they are concerned about health information in an insurance application being kept separate from banking information.�
�Consumers are uncomfortable with the prospect of having too much personal information in one place,� he said.
The survey results indicate that one in five Canadians who have been approved for a bank loan, mortgage or line of credit report feeling pressured to give the bank more business.
Gary McLeod, Chair of the Advocis Board of Directors, and a 30-year insurance industry veteran, confirmed, �This is a common complaint from our members� clients. It�s alarming when you think about how much power the banks already hold over Canadians.�
Interestingly, the survey reveals that the vast majority of Canadians do not know about protections against coercive tied selling, even though the practice is illegal under the Bank Act. Coercive tied selling occurs when a customer is required to buy a product or service as a condition for obtaining another. The lack of awareness of the existence of consumer protection against such practices is an even more serious problem among elderly Canadians, as only 19 per cent of Canadians 65 or older and 15 per cent of women over the age of 55 know that restrictions even exist.
�To make matters worse�, says McLeod, �while the banks claim they have easy and accessible ways of resolving customer disputes, the survey tells us that among the general population an astounding one in three Canadians, and more than half of all Canadians 65 or older, either don�t know about their banks� complaint resolution process or believe one does not exist.�
Mr. Howard points out, �According to the POLLARA report, more than six in ten Canadians believes that removing protections will lead to less choice, and fewer than one in five Canadians believes the price of insurance would decrease in the long term if the protections were removed.�
�The current regulatory structure was put in place specifically to ensure that consumer interests come first. Why would anyone want to jeopardize that?� Mr. McLeod concluded.
About Advocis
Advocis, a long-time contributor to the debate on bank marketing and the sale of insurance, is calling on the government of Canada to safeguard consumer protection, and in particular, the preservation of personal privacy protections and the separation of personal credit and health information, by maintaining the regulatory framework in effect under the Bank Act today. Visit www.advocis.ca.
