CG-12 Internal dispute resolution

From: Financial Consumer Agency of Canada


The new Financial Consumer Protection Framework (FCPF) in the Bank Act and the Financial Consumer Protection Framework Regulations (collectively: “FCPF Requirements”) come into force on June 30, 2022. The FCPF Requirements apply to banks, authorized foreign banks and federal credit unions. This guideline includes references to the Bank Act and to the Complaints (Banks, Authorized Foreign Banks and External Complaints Bodies) Regulations. FCAC plans to update this guideline in due course to remove these references. In the interim, trust and loan companies and insurance companies should disregard these references. 

As of June 30, 2022, banks (including federal credit unions) and authorized foreign banks should refer to FCAC’s Guideline on Complaint-Handling Procedures for Banks and Authorized Foreign Banks.

Publication date: April 10, 2013
Effective date: September 2, 2013


Protecting consumers in their dealings with federally regulated financial institutions (FRFIs) is an important matter for the Government of Canada.

All FRFIs are required by legislationFootnote 1  to have dedicated procedures as well as personnel in place to deal with consumer complaints. It is highly desirable for those complaints to be resolved between the individual consumer and the FRFI that has provided the financial services or products, whenever possible. This promotes confidence in the financial system, allows consumers to understand the process and gives industry members the opportunity to not only resolve disputes, but also to monitor their compliance with the provisions of the Acts, voluntary codes of conduct and public commitments that are designed to protect financial consumers.

The Complaints (Banks, Authorized Foreign Banks and External Complaints Bodies) Regulations (the Regulations) were created in an effort to establish measures to strengthen the dispute resolution framework for banks and authorized foreign banks. As part of these regulations, the Government introduced a new requirement for banks and authorized foreign banks to report to the public annually on the functioning and performance of their complaint handling processes.


This FCAC guideline is intended to assist FRFIs in developing their internal dispute resolution (IDR) policies and procedures to comply with the requirements of legislation to deal with complaints made by persons having requested or received financial products and services.

The guideline outlines the principles that the Financial Consumer Agency of Canada (FCAC) considers essential for the establishment of an effective, efficient and accountable IDR process to help ensure that consumer disputes are handled in a competent manner by FRFIs. If the dispute cannot be successfully resolved through the IDR process, consumers will have an opportunity to escalate their concern to an external complaints body.

Guiding principles

Key principles have been developed to assist FRFIs in establishing their IDR policies and procedures, namely:

  1. effectiveness
  2. efficiency, and
  3. accountability.

These principles will also serve to assist those who are responsible for such policies and procedures in carrying out their duties in a manner that is consistent with legislative requirements.

1. Effectiveness

FRFIs must be able to demonstrate that they have implemented effective policies and procedures designed to achieve the effective resolution of consumer complaints. This can be achieved by making sure that the policies and procedures are well understood and are being followed by those involved. When evaluating the effectiveness of the policies and procedures, FCAC will consider whether the following can be demonstrated:

  1. organizational commitment
  2. adequate resources
  3. training for staff, and
  4. monitoring and reporting systems.

1.1 Organizational commitment

A commitment to establish, maintain and adhere to effective IDR policies and procedures should exist at all levels of the FRFI, from the working level to the board of directors. Such commitment is essential to ensure that IDR policies and procedures are an integral part of the FRFI’s culture.

Organizational commitment can be demonstrated by:

  • establishing procedures that ensure complaints are addressed in an objective manner
  • conducting regular reviews of IDR procedures to identify areas for improvement
  • soliciting regular feedback from participants of the process , and
  • confirming the commitment to resolving complaints by taking appropriate actions when necessary

1.2 Adequate resources

In order to assess the adequacy of resources with respect to IDR policies and procedures, FRFIs should consider things such as the size of the organization, customer base and scope of products and services offered, in addition to evaluation of staff, documentation, operational support, materials and financial resources. Moreover, resource needs should be regularly re-evaluated to help ensure that they remain adequate for the FRFI.

Legislation requires that each FRFI designate an officer or employee to implement its complaint-handling procedures, and one or more officers or employees to receive and deal with those complaints. FRFIs must demonstrate that the officers designated for the purposes set out in the legislation are adequately trained, and that their skills and authority are adequate to carry out the tasks required. For example, a designated officer or employee receiving and dealing with complaints should have:

  • the required experience, competencies and authority to deal with complaints
  • the authority to access the information needed to deal with complaints
  • the authority to ultimately resolve or recommend resolution of complaints.

Resource allocation considerations should also cover other elements, such as file retention for future reference and monitoring, and robust and timely reporting to FCAC as required by FCAC’s Supervision Framework.

1.3 Staff training

FRFIs must demonstrate initial and ongoing efforts to train and familiarize all relevant staff with IDR policies and procedures, including their roles and responsibilities in relation to such policies and procedures. To this end, FRFIs should be able to show that they have:

  • identified key personnel within their organization who are responsible for or involved in the IDR process
  • provided the necessary initial training and continue to provide ongoing training to front-line employees who engage directly with customers, as well as to those employees who have less direct contact with customers but who are nonetheless involved in the process
  • made information readily available to employees that enables them to understand and follow the policies and procedures with ease
  • established a review process to ensure training programs remain up to date and relevant.

1.4 Monitoring and reporting

It is important that FRFIs retain information related to complaints to allow them to conduct regular analyses of historical information. Complaint data is a useful means of tracking compliance issues and/or identifying potential compliance risks.

In addition, the reporting of some specific complaint data is also a requirement for all FRFIs under FCAC's Supervision Framework.

Therefore, FRFIs must ensure that adequate systems and reporting policies and procedures are in place to handle complaints. This could include elements such as:

  • establishing policies, procedures and reporting systems that include provisions for capturing and retaining information about complaints
  • keeping the data in an accessible form
  • establishing protocols for reporting complaints to FCAC, as set out in the framework requirements for reportable compliance complaints and reportable compliance issues, and
  • reviewing policies and procedures on an ongoing basis and providing updates of any changes to FCAC, when applicable.

The Regulations also require that, on an annual basis, banks and authorized foreign banks must publicly report information on their complaint-handling processes. Specifically, the regulations require reporting on the following:

  • the number of complaints that were dealt with by the officer or employee designated by the bank or authorized foreign bank to deal with complaints who holds the most senior position identified for that purpose in the procedures established by the bank or authorized foreign bank
  • the average length of time taken by that officer or employee to deal with the complaints
  • the number of complaints that, in the opinion of the bank or authorized foreign bank, were resolved by that officer or employee in accordance with those procedures to the satisfaction of the person who made the complaint.

Banks and authorized foreign banks must ensure that adequate procedures are established to meet this annual reporting requirement. For the purpose of the Regulations, the procedures must specify the role which holds the most senior position designated by the bank or authorized foreign bank to deal with complaints (e.g. Bank Ombudsman). Furthermore, banks and authorized foreign banks must establish clear timeframes for the public reporting and identify an appropriate mechanism or document through which the reporting requirement will be made public (e.g., Annual Report, Public Accountability Statement, etc.).

2. Efficiency

A FRFI should have policies and procedures that lead to the comprehensive assessment and timely resolution of consumer complaints, both internally and in the context of addressing complaints brought to its external complaints body.

2.1 Timeliness for internal dispute resolution

Timeliness in responding to complaints is a key element of a successful IDR process. Complaints should be handled so as to limit delays. Ensuring a proper flow of information throughout the complaint-handling process and regularly updating consumers on the progress of their complaints can mitigate delays.

FRFIs should find the most efficient and effective ways of resolving complaints, particularly when complaints are simple and may be easily addressed. Therefore, FRFIs should have policies and procedures in place that seek to achieve the following:

  • Resolve consumer complaints as soon as possible. In their policies and procedures, FRFIs should outline the actions and time frames that:
    • provide the consumer with an acknowledgement of receipt of their complaint without delay, once the complaint reaches the first level in the FRFIs complaint escalation process
    • within 90 days or less when possible, provide the consumer with a substantive written response to his or her complaint that includes, at a minimum, all of the following information:
      • the FRFI’s final decision/offer in response to the complaint, including appropriate details and explanations regarding how the final decision was reached, and
      • the consumer’s right to escalate the complaint to the external complaints body of which the FRFI is a member upon receipt of the FRFI’s final decision, if the complaint has not been resolved to his or her satisfaction through the IDR process, or if the complaint has not been resolved within 90 days following receipt of the complaint at the second level of complaint handling.
  • Inform consumers about the IDR procedures. A FRFI should disclose the process for each step it will follow after receiving a complaint. Such information could be included in the acknowledgement of receipt of complaint, provided to the consumer in a brochure and/or set out on the FRFI’s website.

    For banks and authorized foreign banks, the Regulations require that the complainant be provided with any other information necessary to enable them to meet the requirements set out in the bank’s or authorized foreign bank’s IDR procedure or process. To this end, the related policies and procedures of the bank or authorized foreign bank must demonstrate how this requirement will be met.
  • Update consumers about the status of their complaints at specific points during the complaint-handling process. For example, the FRFI could provide status updates to consumers at the conclusion of each step, as established by the FRFI. FRFIs must be able to document the complaint once it is escalated through the IDR process.
  • Identify and highlight circumstances in which an extension to the timeline may be warranted. Consumers should be notified of potential delays in the IDR process, as well as the reason(s) for the delays. Policies and procedures should set out the circumstances in which complaint resolution could exceed the established timeframes. If the FRFI takes longer than 90 days to investigate and respond to a complaint, the FRFI should advise the consumer about his or her rights to escalate the complaint the external complaints body and how long the investigation may take should the consumer decide to leave the complaint with the FRFI.

2.2 Working with the external complaints body

While most consumer complaints are resolved by FRFIs within the timeframes outlined above, policies and procedures should provide for those situations where complaints are not addressed by a FRFI within the established timelines or are not resolved to the satisfaction of the consumer. In such cases, consumers have the right to raise their complaint to the FRFI’s external complaints body. By law, every FRFI must be a member of an external complaints body and, in the case of banks and authorized foreign banks, an external complaints body approved by the Minister of Finance.

FRFIs should establish internal policies and procedures that allow consumers to escalate their complaints as easily as possible to its external complaints body, and achieve the following:

  • consumers are made aware of their right to escalate their complaint to an external complaints body, and understand how and when to do so
  • when a consumer escalates a complaint to a FRFI’s external complaints body, and once the consumer provides the external complaints body with consent for the FRFI to release information about the complaint, the FRFI provides the external complaint body with all the information that relates to that complaint.

3. Accountability

IDR policies and procedures should foster accountability as complaints move through the process. This can be achieved by making the process transparent and accessible to consumers, and ensuring that policies and procedures are well documented.

A FRFI’s IDR process should be accessible, straightforward and easy for consumers to understand. The IDR policies and procedures should facilitate the understanding and use of the process.

3.1 Accessibility for consumers

FRFIs must demonstrate that they have taken appropriate steps and have appropriate procedures in place to provide consumers with information about their IDR process. Legislation requires that FRFIs make their complaint-handling procedures available:

  • in brochures
  • on their website, and
  • in writing, upon request.

FRFIs can also look for other ways to ensure that consumers know about the IDR process at key points during the process.

FRFIs must demonstrate the accessibility of their IDR process by ensuring that the information they provide to consumers about their IDR process meets the following criteria:

  • provides details on how consumers can complain to the FRFI (e.g. by letter, telephone, in person or electronically)
  • is written in language that is clear, simple and not misleading
  • presents information that enables consumers to understand the entire IDR process, including their rights and responsibilities
  • provides details for continued communication with consumers and informs them of the next steps, which allows them to navigate the complaint process confidently
  • provides information about how consumers can contact FCAC, as set out in the legislation.

3.2 Transparency

FRFIs must have policies and procedures in place to ensure that consumers can obtain, upon request at any time during the complaint handling process, the up-to-date status of their complaint. This includes which step in the process their complaint is and what the next steps are. The ability to obtain such status updates should be communicated to the consumer at the initiation of the complaint escalation process.

3.3 Policies and procedures

FRFIs can further demonstrate overall accountability within its IDR process by having written policies and procedures for:

  • receiving complaints or disputes
  • dealing with and investigating complaints or disputes
  • responding to complaints or disputes within set time frames
  • informing complainants about the external complaints body
  • providing the external complaints body with information on complaints that have been escalated by the consumer to an external complaints body, with the consumer’s consent
  • capturing information about complaints or disputes, and
  • reporting to the public annually on the functioning and performance of its complaint handling.
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