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How banks sell you on credit card insurance: Hidden camera investigation (Marketplace) - YouTube
Channel: CBC News
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♪ [ theme ]
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-[ David ] Undercover
at your bank.
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Insurance is gonna pay
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for the outstanding
balance on the card.
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David: Is there a secret
charge on your credit card?
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How to fight back.
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I got a refund
of $1,250.
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David: This is your<i>
Marketplace.</i>
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[ ♪♪ ]
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Looking for
an adrenaline rush?
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[ ♪♪ ]
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How about plummeting
to the earth from 10,000 feet?
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[ ♪♪ ]
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Oh, my God.
Amazing.
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I have to come
back, like, tomorrow.
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You're going to
jump out of a plane?
[41]
Yes, we are.
[42]
Are you risk takers?
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I love adrenaline.
-Like, the rush.
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Think it's just the excitement.
[47]
When you think about the
things you're about to do here,
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jump out of a plane, what
are the things you do
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to minimize those risks?
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I need a parachute.
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If I can give me a second
one, that would be great.
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-[ David ] They wouldn't
jump out of a plane
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without a parachute.
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How about jumping into debt?
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Let me ask you a question that's
going to be a crazy segue here.
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Do you have a credit card?
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-Yeah.
-Okay.
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What kind of parachute do
you have for your credit card?
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What happens if you
can't pay off your balance?
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If I couldn't pay it off?
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What do you mean?
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Most people
haven't thought about it,
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but banks sure have.
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Have you ever heard
of something called
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balance protection insurance?
-No.
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If you lose your
job, if you get sick,
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if there's something where
you can't pay that,
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we will cover it for you.
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That's balance protection.
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It sounds good.
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Life is unexpected.
It's dangerous.
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Life is a risk.
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That piece of mind isn't
free, though.
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For a monthly fee, banks say
they will help with your bill if
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you lose your job,
become disabled,
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get sick or die.
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The cost of that
coverage, though,
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can really add up.
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You have to
wonder, is it worth it?
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Hi, "Marketplace".
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Hey, "Marketplace".
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I live in Toronto.
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I live in Ottawa, Ontario.
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I paid them almost $500.
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$1,250.
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Just over $6,000.
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And get this.
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Some of you tell us certain
banks secretly add the charge
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to your bills.
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I didn't know about
this insurance.
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I didn't ask for it.
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They had put balance protection
insurance onto my account
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without my permission.
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I told them multiple
times I don't want this.
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I found this whole
situation very scummy.
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Some of you feel the insurance
has so many exclusions,
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it often doesn't pay out.
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Just ask Haider Ameen.
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A few years ago, he signed up
for balance protection with TD.
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They told me that they're
going to cover me
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in case I lose my job.
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Sounded like a good deal.
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Until he was unemployed.
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They didn't accept my claim.
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The bank says he
didn't qualify for protection
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because he quit his job.
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But Haider disputes that.
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Besides, he says, the plan
was never properly explained.
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Like, I felt like they were
taking advantage of me
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as a student.
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They didn't explain things for
me enough to know more about
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balance protection.
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[ ♪♪ ]
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When you sign up, a
percentage of your balance is
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added to your monthly bill.
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Now, rates vary.
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Let's say you have $2,000
on your credit card
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and you're charged 1%.
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You would be adding 20 bucks
to your bill every month.
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Over a year, that's $240.
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Over ten years, 2,400.
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And then there's the fine print.
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In many cases, it only covers
the minimum monthly payment or a
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small percentage
of your balance.
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Banks are supposed to
explain all that up front.
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But are they?
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With Haider's help, we're
taking hidden cameras
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inside multiple branches.
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Haider is going to sign
up for a new credit card
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at each one.
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Mmm-hmmm.
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Haider says he's heard
this before from his own bank.
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Another bank,
similar promises.
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This insider should know.
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He's a top seller
at a big bank.
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This isn't his voice,
but these are his words.
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He's so concerned
about losing his job,
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we're hiding his identity.
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Would you buy it?
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He says he's sold hundreds
of policies and seen
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many claims denied.
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Back on hidden camera,
let's test how this employee
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pitches balance protection.
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Three banks,
three sales pitches.
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Nothing about the
many exceptions.
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And that's not all.
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Have there be instances
where employees of the bank have
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signed people up for this
insurance without them knowing?
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Why is that happening?
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Bank employees
have sales targets.
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And some make commissions.
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Maybe that's why
she keeps pushing it.
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Haider says no.
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But it seems like the insurance
has already been added.
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Don't fall for that
hard sell, John Lawford says.
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He's a consumer rights advocate.
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It has too many bad features.
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It's expensive.
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It doesn't cover a
lot of situations.
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And it pays out a very
small amount most of the time.
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Is it worthwhile
for most people to get?
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Of course not.
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No, really.
It's garbage.
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So if it's all that,
why are the banks selling it?
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It's pure profit.
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In the U.S., U.K.,
and Australia,
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regulators fined some
banks billions of dollars for
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misleading consumers about
balance protection
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and similar practices.
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Some banks have even
stopped selling the insurance.
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In terms of action, Australia,
England have done
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more than Canada.
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Our own watchdog, the
financial consumer agency of
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Canada, calls this insurance
problematic and
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high risk to consumers.
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Clear warnings but no fines.
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We ask Canada's big banks to
explain how and why they
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sell this insurance.
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They tell us it's an optional
product meant to help customers
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when unexpected events happen.
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They also say that they take
customer concerns seriously and
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will investigate
if issues arise.
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Welcome to TD credit cards.
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TD tells us it pays
out claims most of the time,
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though not in Haider's case.
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He's fighting for
a $1,500 refund.
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Well, here's the thing.
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I want my money back.
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I feel like I have
been treated unfairly.
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No luck for Haider.
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But remember these guys?
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They say they were
signed up without their okay?
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How's their luck now?
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Finally after a month
of long phone calls,
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I got a refund of $1,250.
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My friend cancelled for me
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and get some of my money back.
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After months of fighting, I
was able to get a full refund of
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just over $6,000.
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