Scotiabank failed to gain proper consent for optional services added to client accounts, but Canada’s financial consumer authority assessed no fines because it found the bank identified, reported and corrected the problem responsibly.

The Financial Consumer Agency of Canada (FCAC) recently released a judgment from its investigation into improper sales practices. The investigation found that from February to June 2018, Scotiabank violated rules to properly gain client consent before optional services such as creditor insurance were added to accounts. But while FCAC investigators originally recommended a fine of $80,000, commissioner Judith Robertson opted to eliminate the fine.

In the summary judgment, Robertson noted that Scotiabank “moved quickly to prevent additional non-compliance, and instituted effective remediation to all affected and potentially affected customers, thus mitigating the potential harm.” She also cited the Bank’s violation history over the past five years as another mitigating factor in deciding to impose no financial penalty.

According to the judgment, in May 2018 Scotiabank’s internal compliance team found instances in which one of its customer contact centres was enrolling customers in optional creditor insurance without express consent. In June, employees implicated in the non-compliance were terminated or disciplined, and the particular sales unit ceased operations. In July, it completed an internal review of its controls and in August reported the problem to FCAC.

Although Scotiabank asked not to be named in the summary, consistent with other recent bank breaches of consent rules, Robertson said identifying the bank promotes “more broadly the importance of banks ensuring that their control framework for express consent evolves appropriately as the business evolves” and would “highlight the importance of Scotiabank’s effective post-breach actions, which served to mitigate the impact of harm and negligence and will provide a useful example to the industry.”