* Alleged breaches relate to 'expressed consent' rules
* Study focused on sale of credit insurance products
* FCAC to beef up enforcement teams (Adds comment from interview with FCAC Commissioner)
By Matt Scuffham
TORONTO, March 20 (Reuters) - Canada's financial watchdog is investigating the potential breach of market conduct obligations by banks following a year-long review of sales practices at the country's six biggest banks, the agency said on Tuesday.
The breaches relate to the sale of products by the banks without the expressed consent of their customers, the Financial Consumer Agency of Canada's (FCAC) Commissioner Lucie Tedesco said in an interview.
"The information given to the consumer may not have been given to the consumer in a way that is clear, simple and not misleading," Tedesco said. "Sometimes they think they're getting a '2-for-1' deal but don't realize they're paying a premium for that 'add-on' product."
Tedesco said the study had focused on credit insurance products, about which the FCAC had received the most complaints. The products, meant to protect borrowers in the event of sickness or unemployment, were sold to customers who didn't want them or who would not be eligible to make claims.
The mis-selling of similar products in Britain led to banks paying more than 40 billion pounds ($56 billion) in compensation.
However, the chance of sizeable payouts by Canadian banks is slimmer because the FCAC does not have the power to order banks to compensate customers who were mis-sold the products. It can, however, impose fines on banks.
The regulator has a two-year window to investigate the complaints, Tedesco said.
The FCAC said the study had not found evidence of widespread mis-selling, a finding welcomed by the Canadian Banking Association.
"The six largest banks in Canada cooperated fully with FCAC and we are encouraged that the review found no widespread mis-selling and that banks get this right the vast majority of the time," said the CBA's chief executive, Neil Parmenter.
The FCAC said the study found that financial incentives for staff may increase the risk of mis-selling. It said it was proposing a number of measures that banks could take to reduce those risks and would beef up its enforcement teams to allow it to monitor banks more proactively. It said its report would be shared with government officials.
The regulator reviewed the sales practices of Canada's six largest banks; Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal , Canadian Imperial Bank of Commerce and National Bank of Canada.
$1 = 0.7138 pounds Editing by Bernadette Baum and Frances Kerry