Banks exploit their clients’ trust with impunity

Commentary by Tom Henihan

Banks never make mistakes benefiting the customer but they often make mistakes benefiting the institution. It is usually the case that these mistakes persist until someone outside the institution discovers them and only then is the bank prompted to rectify the error having conveniently profited for years.

When these errors are finally rectified, banks are only obliged to reimburse their customers the minimum amount and are not required to make any additional reparation.

There is also no enquiry into the possibility of wilful deception and no expression of culpability, which is hardly a deterrent to making similar mistakes again.

CIBC is the latest bank to be exposed at this game and it is now refunding 1.4 million customers for so called mistaken credit card fees and over-priced premiums on optional creditor insurance.

Typically, the bank has refused to tell the public or its clients how the error finally came to light, only saying that the mistake has been corrected.

The refunds include interest and amount to approximately $50 to each customer. Fifty dollars isn’t much on an individual basis but for the bank that amounts to $70 million, which goes to show how profitable it can be to nickel-and-dime customers.

Banks profit from a customer’s every move or at least every movement of a customer’s money, taking a piece of the action with every transaction. Contrary to the overt, positive messaging beamed out from posters on the bank walls, depicting happy clients with radiant smiles, banks seem to abuse and intimidate their customers in the same way that criminals abuse and intimidate the people from whom they extort money.

CIBC’s declaration of “Vision and Values” says under the heading of trust:

“We believe in the instincts and talents of our people. We support and recognize those who do what’s right for our clients.”

I am sure CIBC trusts the instincts and talents of its people but looking at a 14-year error that penalized its clients, I doubt its clients are its first concern.

In 2017, CIBC took in a record $4.7 billion in profit with $1.16 billion in the last quarter alone, up from $931 million during the same period in 2016.

Another “clerical error” that also needs to be corrected I believe, is CIBC’s CEO, Victor Dodig, receiving $8.94 million in compensation in 2017, up almost two per cent from the previous year.

What any person can do to justify earning almost $9 million a year is a mystery and it seems extremely generous compensation for overseeing profitable clerical errors and usurious practices.

One would think that to deserve such enormous financial compensation, that the nine million dollar man Victor Dodig would run a tighter ship, rather than one that allows a mistake that penalizes customers to persist for 14 years.

It would also be appropriate if the institution he oversees didn’t act so imperious and refuse to say how or by whom that error was finally discovered.

I could never fathom the significance of the penguin mascot featured on CIBC TV commercials. However, now I wonder if it is reminiscent of the Batman’s nemesis “The Penguin,” a Gotham City criminal who masquerades as charming and honourable.

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