Standing Senate Committee on National Finance (NFFN) (May 28, 2024)
ISSUE: The complaints-handling process

    Key points

Note: the explanation immediately below was used by Commissioner Robertson at FINA and we recommend similar language for the Senate committees.

• While FCAC does have a call centre where consumers can share information on their complaints, we are not a complaint resolving entity. Our role is to supervise the complaints-handling system for banks.
• As a result of the Financial Consumer Protection Framework introduced in 2022, bank customers benefit from new and enhanced protections, including a more effective and timely complaints handling regime.
• This includes a 56-day time-period for banks to deal with a complaint from the day it is received.
• Banks have an obligation to put in place an effective complaint-handling process, and to inform their customers of their process.
• The process must include the right for consumers to escalate their complaint to an external complaints body if consumers are unsatisfied after following their bank’s complaint handling process.
• Banks are obliged to use one of 2 external complaints bodies:
  • the Ombudsman for Banking Services and Investments, which was recently designed as Canada’s single external complaints body, or
  • the ADR Chambers Banking Ombuds Office, which continues to handle banking-related complaints until November 1, 2024.
• FCAC reviews the complaints it receives from banks to inform its risk-based approach to supervision.
• This visibility into complaints against banks also helps us stay informed about what's going on in the marketplace.
• FCAC reports annually in aggregate format on the number of complaints it receives directly from consumers and from federally regulated financial entities. See page 20 of FCAC’s 2022-2023 Annual Report for our latest data and the top categories of complaints.
• In dealing with consumer complaints, banks must comply with the regulatory requirements as stipulated in the Bank Act, as well as the FCAC Guideline on Complaint-Handling Procedures for Banks and Authorized Foreign Banks.

Qs & As

1. If a consumer complains to FCAC, does it lead to anything?

Complaints about MCOs

• FCAC reviews the complaints it receives to inform its risk-based approach to supervision.
• Any consumer can file a complaint about a federally regulated financial institution with FCAC at no cost.
• Federally regulated financial institutions must comply with certain obligations when they deal with consumers. For example, when opening a bank account, they must provide information that is clear, simple and not misleading. These are known as market conduct obligations.
• However, FCAC is not a dispute resolution agency and cannot act on a consumer’s behalf to contact a financial institution.
• While FCAC investigates breaches of market conduct obligations, including disclosure of fees it doesn’t investigate complaints that are specific to business decisions, for example:
  • the pricing of products
  • lending policies
  • billing disputes
  • the quality of service

What FCAC does with complaints generally

• Consumers who have an issue with their financial institution may report the complaint to FCAC.
• FCAC will ask for details about the complaint to help determine if it falls within its mandate. For instance, whether the complaint is about an entity FCAC supervises and whether the complaint relates to the entity not meeting a market conduct obligation.
• FCAC uses information from complaints to identify and address situations when federally regulated financial entities don’t comply with their obligations under law, regulations, codes of conduct or public commitments.
• FCAC reviews the complaints it receives to inform its risk-based approach to supervision. This work helps identify situations when federally regulated financial entities may not be compliant with their obligations under law, regulations, codes of conduct or public commitments.
• FCAC reports to Parliament on the number and types of complaints it receives. This includes reporting on the performance of federally regulated financial institutions, ECBs and PCNOs in meeting their market conduct obligations.
• Complaints also help FCAC monitor and evaluate trends and issues that have an impact on consumers of financial products and services.