FCAC to review business practices in the federally regulated financial sector
March 15, 2017
As part of its ongoing effort to enforce federal financial consumer protection obligations, the Financial Consumer Agency of Canada (FCAC) today announced that its next review of business practices in the federally regulated financial sector will begin in April.
FCAC Commissioner Lucie Tedesco expressed concern with recent allegations related to the sale of products and services by financial institutions to consumers without properly obtaining their prior express consent, an issue the FCAC review will focus on.
The following statement was issued by Commissioner Tedesco:
“FCAC is responsible for enforcing federal financial consumer protection obligations. The law requires that, in order to provide consumers with new or expanded products or increase their credit limits, financial institutions obtain their customers’ prior consent and disclose key information about the costs and charges of the products they are purchasing.
“Financial institutions’ compliance with these rules is non-discretionary and the message must be disseminated from the boards of directors on down to customer-facing staff. These issues have been discussed in my recent meetings with the CEOs and boards of Canada’s leading banks. In addition, in a recent address to their compliance professionals and in an industry-wide letter, I expressed my expectation that banks and other financial institutions be proactive in scrutinizing the effectiveness of their policies, procedures and practices to ensure that consumers are protected.
“Through the industry review we are announcing today, we will examine financial institutions’ business practices in relation to express consent and disclosure, including the identification of any factors that may be contributing to non-compliance. We will investigate and enforce any incidence of non-compliance.”
FCAC encourages those consumers who have experienced what they believe to be misleading business practices, or who have received a financial product or service to which they did not consent, to file a complaint with their bank and with FCAC’s Consumer Services Centre at email@example.com.
FCAC conducts industry reviews regularly to gather information from multiple federally regulated financial institutions or stakeholders on a specific compliance matter. Industry reviews may result in enforcement action if appropriate. The purpose of industry reviews is:
- to assess current or emerging issues on a specific topic or theme
- to identify and examine industry practices or trends
- to verify levels of compliance with market conduct obligations
- to collect information for policy discussions
Regulated entities participating in industry reviews are expected to comply with FCAC requests. Information from these reviews may be used to provide guidance, establish best practices or inform policy makers.
FCAC has published as a Compliance Bulletin the letter it sent to financial institutions in early February, 2017 reinforcing the Agency’s expectation that they comply with legislated consumer-protection provisions.
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