Insurance Upsell Smells Off

    Hi Ben,

    Uh, you might be getting tired of me. I hope not. Anyhoo, I just got back from signing papers for a debt consolidation loan, and I’m pretty sure two months ago I would have been completely suckered into buying this insurance. But two months of reading The Consumerist have made me suspicious, paranoid and miserly. Thank, Consumerist!

Her letter to TD Canada Trust, taking them to task for suggesting she buy “mandatory” insurance on her loan which ended up being actually 1) optional and 2) possibly illegal, follows after the jump. The bank responded and then she gives them whatfor, forthwith and so forth.

Stephanie writes:

Dear TD Canada Trust,

I recently applied for a debt consolidation loan at the Sheppard Centre location in Toronto, and was helped by XXXX. Ms. XXXX was very helpful. She was, so far as I know, honest with me about my options, and took the time to explain them. We decided on a loan to be paid back over a 36-month period. I feel very relieved, and confident about paying off my debt in that time. I am writing because this otherwise excellent experience was tainted for me when it came time to sign the papers and close the deal. Ms. XXXX presented me with a contract for insurance, and as I was reading over the terms I asked if it was included in the monthly payments we had discussed, and also if it was mandatory. She answered yes to both of questions. I inquired further as to what the insurance would actually cover. As she explained, it seemed to me that my insurance through my work was more than adequate, and said so. She said more insurance couldn’t hurt. I was willing to sign it, after all, it was free! But lo and behold, when the second contract came out, the one for the loan, the monthly payments written there were about $14.00 less than what she had quoted me. I asked if the difference in figures was due to the ‘mandatory’ insurance. She said yes. At that point I skimmed the insurance contract again and found it was indeed optional. I said I didn’t want it, and she printed a new contract stating that I had declined it. I don

t know what your policies are, or what pressures you may or may not put on your consultants to sell this insurance, but I think it jeopardizes your relationship with your customers. I do almost all my business with TD and its related companies. I have my mortgage with you, my chequing account, my credit cards, my home insurance and now this loan. Was this $14.00 per month worth making me wonder if the advice I

d taken from Ms. XXXX and countless other TD staffers over the years was truly in my best interest or was merely an up-sell? I find it particularly upsetting because of the nature of my business in this case, i.e. clearing my debt. I don

t have the money to spare. I came to Ms. XXXX trying to take responsibility for my finances, and she very nearly had me sign on for a service that would have cost me $500 over the course of my loan, and it was a service I didn’t need, want, or ask for. Again, I would like to emphasize that in every other way, Ms. XXXX provided me with good service. I hope it is not your company policy to encourage your employees to lie or mislead customers, or to trick them into buying services they don

t want. If Ms. XXXX did act of her own accord, I would be surprised and disappointed.



This week she writes:

    “Hi again,

    A week ago-ish I sent you guys a copy of the letter I sent to my bank because they tried to get me to buy insurance I didn’t want. Blah di blah petulant and making a nuisance of myself in hopes of getting them to realize their policy of upselling sucked. They called (which is nice) and denied it was a policy, claimed it was a misunderstanding, and then finally admitted a rogue agent MIGHT have tried to sell me insurance, but it was really for my own good.

    Of course I told my mom all about it. So today she calls me because there’s an interesting article in the paper I should read: [Toronto Star]

    Essentially, offering me the insurance at all was in violation of the Canada Bank Act – I’m not sure if that makes it illegal, but it doesn’t sound like they encourage it. Here’s a back-up story that’s more explicit – they actually draw the connection between making people buy insurance and qualifying for a loan, which is basically what I was told: [Canadian Underwriter]

    I’m so sure a glorified bank teller decided to violate a national statute because she was worried about my health. No WAY does TD instruct them to sell sell sell!

    And here’s my follow up letter to TD:

Dear TD Canada Trust,

I recently wrote to you about my experiences while applying for a credit consolidation loan, noting I felt I had almost been duped into buying insurance I didn

t need or want [see enc.]. I was contacted by a customer care agent (named either Bebe or Bidi), and we discussed what had happened. Although at first she seemed reluctant to believe that it was not simply a miscommunication, when I assured her I had NEVER discussed insurance during my four bank visits to handle this loan, she had to admit being handed a contract for insurance was a bit much. She apologized, I was mollified, and all was well.

Since then, two things have happened. First, I got a letter from TD asking me to confirm once more, for the record, that I don

t want any insurance. Apparently my signature is in the wrong box on my form declining it. I’ve corrected this and sent it back to whence it came, and sincerely hope that having declined this insurance in writing twice, I

ll not have to decline it again. Then I was idly flipping through the paper when I ran across an article suggesting the entire insurance debacle was not only unprofessional and slightly sleazy, it might even be illegal. I’ve enclosed that article and another I dug up that seem to say that offering me insurance in the branch when I didn’t ask about it is actually against the policies of the Canada Bank Act. I understand the industry hopes to review those policies, but they haven

t changed yet.

I don

t require any further communication. I just wanted to note my dissatisfaction with this particular transaction. But thank you for the novel experience of agreeing with the Conservative government, which I understand wants to keep these insurance regulations in place.