Guideline on Complaint-Handling Procedures for Banks and Authorized Foreign Banks

Publication date: January 27, 2022

Effective date: June 30, 2022

I. Introduction

1. The Financial Consumer Agency of Canada (FCAC) has developed a Guideline on Complaint-Handling Procedures for Banks and Authorized Foreign Banks (Guideline) to set out its expectations with respect to Banks’ (including federal credit unions) and Authorized Foreign Banks’ (Banks) implementation of the complaint-handling provisions in the Bank Act and the Financial Consumer Protection Framework Regulations.

2. Part XII.2 of the Bank Act establishes the provisions that apply to Banks for dealing with complaintsFootnote 1  by any personFootnote 2  who is an actual or potential customer of that Bank (Consumer).

3. FCAC encourages other federally regulated financial entities, such as trust and loan companies and insurance companies, to review this Guideline to develop and improve their policies and procedures (Policies and Procedures).

4. A Bank is responsible for ensuring it meets the requirements established in the Bank Act and that its complaint-handling Policies and Procedures are satisfactory to the Commissioner.Footnote 3

5. A Bank, and any parties subject to the requirements in s.627.15 of the Bank Act (Third Parties), must ensure that Consumers have access to the Bank’s complaint-handling Policies and Procedures.

6. FCAC recognizes that Banks may tailor their complaint-handling Policies and Procedures to align with the nature, size and complexity of their business, distribution channels, and products and services.

7. This Guideline should be read in conjunction with legislation and regulations.

II. Key principles

8. A Bank’s senior management and the committee of the board responsible for the Bank’s compliance with consumer provisions—or, in the case of an Authorized Foreign Bank, its senior management—should oversee the establishment and implementation of complaint-handling Policies and Procedures. In establishing those Policies and Procedures, a Bank should be guided by the following principles:

Effectiveness

A Bank’s complaint-handling Policies and Procedures should be comprehensive and implemented to deal with Consumer complaints in a fair and consistent manner.

Timeliness

A Bank’s complaint-handling Policies and Procedures should ensure the Bank deals with complaints promptly and without unnecessary delays.

Accessibility

A Bank’s complaint-handling Policies and Procedures should be easy for Consumers to locate, navigate and understand.

III. Effective complaint-handling Policies and Procedures

9. A Bank seeking to incorporate, or to continue to operate as a Bank, must provide a copy of its complaint-handling Policies and Procedures to FCAC within the timelines specified during the application process.

10. When a Bank amends its complaint-handling Policies and Procedures, it should file a consolidated version of the amended complaint-handling Policies and Procedures with FCAC as soon as the amendments are approved internally.

11. A Bank’s complaint-handling Policies and Procedures should support consistency in decision-making, with redress provided as appropriate.

12. A Bank’s complaint-handling Policies and Procedures should ensure that all complaints are dealt with in a fair and consistent manner at all stages of the complaint-handling process.

Designating employees

13. A Bank must designate 1 officer or employee (Employee) in Canada to be responsible for implementing its complaint-handling Policies and Procedures.

14. A Bank must also designate 1 or more Employees in Canada to receive and deal with complaintsFootnote 4  (Designated Employees). A Bank may designate any Employee whom it deems appropriate.

15. The Employee whom a Bank designates to be responsible for implementing its complaint-handling Policies and Procedures and the Designated Employee who holds the most senior position for dealing with complaints (the Senior Designated Employee) can be the same Employee.Footnote 5  The title and responsibilities of any Designated Employee should reflect that the position deals with complaints on a regular basis.

16. All Designated Employees should have the experience, competencies and authority required to deal with complaints, including resolution.

17. To be effective, a Bank’s complaint-handling Policies and Procedures should:

17.1. establish clear roles, responsibilities and accountabilities for all Employees involved in complaint-handling

17.2. provide for the monitoring of complaints, including those it receives from or in relation to Third Parties

17.3. include mechanisms for soliciting regular feedback from Consumers at all levels of the Bank’s complaint-handling process

17.4. include a process for monitoring and testing Policies and Procedures and updating them as required

17.5. ensure all complaints are dealt with in a fair, consistent and objective manner and provide redress as appropriate

17.6. ensure that all Employees who deal with complaints follow the same Policies and Procedures

17.7. include analysis of complaint data to identify opportunities to better serve Consumers and to strengthen compliance with market conduct obligationsFootnote 6

Training

18. A Bank’s complaint-handling Policies and Procedures should include:

18.1. initial and ongoing formal training on complaint-handling for all Employees who deal with complaints

18.2. a system for monitoring the status of Employee training

18.3. mechanisms to measure and test the effectiveness of training

18.4. timelines and processes for reviewing training on a regular basis to ensure accuracy and for updating training in a timely fashion, as required, particularly in the event of:

19. A Bank’s training for Designated Employees should reflect the Employees’ specific roles and responsibilities.

20. A Bank should allocate sufficient financial, technological and operational resources to implement an effective complaint-handling training program.

Systemic issues

21. A Bank’s complaint-handling Policies and Procedures should include mechanisms for identifying and remedying any recurring or systemic problems by:

21.1. addressing the underlying reason behind the complaint and taking corrective action, where appropriate

21.2. tracking and analyzing the causes of individual complaints to identify the root causes that are common to various types of complaints

21.3. addressing whether such root causes may also affect other processes, products or services

21.4. addressing whether other Consumers may have potentially suffered detriment from such root causes

Redress and reimbursement policies

22. A Bank’s complaint-handling Policies and Procedures should include a comprehensive redress policy that supports redress and reimbursement.

23. Complaint-handling Policies and Procedures should ensure that a Bank can provide its Consumers with redress and reimbursement for financial and non-financial impacts in a timely manner that is in keeping with, and based on, the circumstances of the complaints.

24. Where a recurring or systemic issue has been identified, complaint-handling Policies and Procedures should ensure that the Bank provides redress and reimbursement to all affected Consumers.

IV. Timely complaint-handling Policies and Procedures

25. A Bank’s complaint-handling Policies and Procedures should document the following potential outcomes when dealing with a complaint:

25.1. a Bank can deal with a complaint by resolving it to the satisfaction of the person who made it (Resolve)

25.2. a Bank can deal with a complaint by closing it if the Bank is unable to Resolve the complaint to the satisfaction of the person who made it (Close)

26. A Bank’s complaint-handling Policies and Procedures should include clear steps that ensure it Closes or Resolves complaints within the prescribed period.Footnote 7 

27. A Bank’s complaint-handling Policies and Procedures should enable the prescribed period to begin on the day the complaint is first communicated to the Bank, by whichever channel.

28. A Bank should review complaints in a manner that accounts for the nature and circumstances. It should do so as quickly as is appropriate, and with particular attention to the length of time a Consumer spends at each step in the complaint-handling process.

Period for dealing with complaints

29. A Bank should identify in its complaint-handling Policies and Procedures the timeframe for referring complaints that have not been Closed or Resolved to a Designated Employee in a timely manner.

30. To be considered timely, the timeframe for referral should not exceed 14 calendar days from the date on which the complaint is first communicated to the Bank.

31. Any Employee may deal with complaints if they are the first point of contact between the Bank and the Consumer, regardless of the channel through which the complaint is communicated to the Bank (for example, in branch, online or over the phone).

32. If an Employee other than a Designated Employee cannot Resolve or Close a complaint within the timeframe for referral identified in the Bank’s complaint-handling Policies and Procedures, they should refer the complaint to a Designated Employee.

33. If an Employee other than a Designated Employee requires input or assistance from a Designated Employee to do so, the complaint should be considered to have been referred to a Designated Employee. Therefore, the Bank must report it to FCAC.Footnote 8 

34. Once a complaint has been received by or referred to a Designated Employee, it should continue to be dealt with by a Designated Employee. However, this does not preclude the possibility of continued interactions between the Consumer, the Designated Employee and an Employee who is not designated.

V. Accessible complaint-handling Policies and Procedures

35. A Bank’s complaint-handling Policies and Procedures for Consumers should describe:

35.1. how the Consumer can complain to the Bank through different channels

35.2. the Bank’s process and the action(s) that will follow

35.3. the Consumer’s right to submit a complaint to the external complaints body if:

35.3.1. the Bank has exhausted the prescribed time period for dealing with the complaint

35.3.2. the Consumer is not satisfied with the resolution offered by the Bank’s most senior Designated Employee

35.4. how to contact the external complaints body

35.5. how to contact FCAC

36. A Bank’s complaint-handling Policies and Procedures should ensure that all Employees who deal with complaints are able to help Consumers navigate the Bank’s complaint-handling process, including referring their complaint to the external complaints body.

Providing information to Consumers

37. A Bank should be able to demonstrate that it has taken appropriate steps to give Consumers the information and documentation—such as contracts, agreements and records of correspondence—that they need to meet the requirements set out in the Bank’s complaint-handling Policies and Procedures.

38. A Bank’s complaint-handling Policies and Procedures should ensure that all Employees involved in handling complaints know and understand the Bank’s disclosure obligations to Consumers under the Bank Act.Footnote 9

39. The information that a Bank provides on its website(s) annually (or in writing when responding to a request) should include:

39.1. the number of complaints that its Senior Designated Employee dealt with that year, including the number of complaints Resolved or Closed

39.2. the average length of time the Bank took to deal with those complaints, from the first interaction with the Consumer to the date on which the complaint was Resolved or Closed

39.3. the products or services to which the complaints related

39.4. a description of the nature of the complaints, beyond the related product or service information contained in the classification

39.5. the number of Resolved complaints

40. A Bank can respond to a request for information electronically if the request is submitted that way or if the Consumer consents to receive electronic documents.Footnote 10

41. The information a Bank provides to Consumers about its complaint-handling Policies and Procedures must be accurate and use language that is clear, simple and not misleading.

Acknowledging complaints

42. A Bank should acknowledge receipt of each complaint without delay, in writing,Footnote 11  regardless of the channel through which it was communicated (for example, in branch, online or over the phone).

43. A Bank can acknowledge a complaint electronically if it was submitted that way or if the Consumer consents to receive electronic documents.

44. A Bank should document and track complaints to final decisions and provide Consumers with comprehensive, up-to-date information in a timely manner upon request.

Dealing with complaints when the Consumer has not provided their name

45. When a Bank receives a complaint from a Consumer who has not provided their name (for example, a complaint submitted through social media using a nondescript handle), the Bank should respond and provide the Consumer with the opportunity to access the Bank’s complaint-handling Policies and Procedures. If that Consumer then decides to provide their identity, the Bank should deal with the complaint according to its complaint-handling Policies and Procedures.

46. When a Bank provides its complaint-handling Policies and Procedures to a Consumer who has not provided their name, and the Consumer still does not reveal their identity, the Bank is not expected to refer the complaint to a Designated Employee. A Bank should still create a record of the complaint with the information it has available.

Substantive written response

47. A Bank should provide a substantive written response to the Consumer, without delay, when a complaint is:

47.1. Closed by an Employee other than a Designated Employee

47.2. Closed or Resolved by a Designated Employee

48. The substantive written response should provide all the information a Consumer needs to make an informed decision on whether to submit the complaint to a Bank’s external complaints body, if they so choose, including:

48.1. the date on which the complaint was communicated to the Bank

48.2. the fact that the prescribed period has been reached and that the Bank was unable to Resolve the complaint within that period, if applicable

48.3. a statement of facts relating to the complaint

48.4. the Bank’s final decision and offer, if any, in response to the complaint, as well as any relevant information about how the final decision was reached

48.5. the method used to calculate redress (monetary or non-monetary), if applicable

48.6. the Consumer’s right to submit the complaint to the external complaints body and how to contact that body

VI. Administrative processes and controls

49. A Bank must report to FCAC every complaint a Designated Employee receives directly or has referred to them. This includes cases where the Designated Employee represents the first interaction between the Bank and the Consumer—whether or not the Consumer has provided their name.

50. A Bank must maintain a record of all the complaints it receives, including any in which the Consumer is not named, and any received by or in relation to a Third Party.Footnote 12   

51. A Bank must report complaints to FCAC in accordance with FCAC’s Mandatory reporting guide for federally regulated financial institutions.

VII. Miscellaneous

52. Questions relating to this Guideline can be sent by email to compliance@fcac-acfc.gc.ca or by mail to:

Financial Consumer Agency of Canada
Attention: Deputy Commissioner, Supervision and Enforcement Branch
427 Laurier Ave West, 6th Floor
Ottawa, ON K1R 5C7

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