Mandatory reporting guide for payment card network operators

From: Financial Consumer Agency of Canada

October 1, 2018

1. Introduction

The Financial Consumer Agency of Canada (FCAC) supervises payment card network operators (PCNOs) to ensure they comply with their legislative obligations, voluntary codes of conduct and public commitments (collectively, “market conduct obligations”) that are overseen by FCAC.

As stipulated in section 5.3 of FCAC’s Supervision Framework, PCNOs must file specific information with FCAC including their complaint-handling procedures, aggregate complaints and compliance issues. As required to fulfill its supervisory activities, FCAC will request from PCNOs other information not addressed in this guide.

FCAC expects institutions to designate a compliance liaison to interact with the Agency and ensure filing requirements are met. The compliance liaison is a senior official serving as the regulated entity’s main point of contact responsible for communicating and liaising with FCAC on the regulated entity’s market conduct obligations.

2. Purpose

This mandatory reporting guide provides details about specific information PCNOs must file with FCAC. This guide complements FCAC’s Supervision Framework, published in April 2017 and in effect as of October 1, 2018. However, it is not intended as a substitute to the market conduct obligations monitored by FCAC. When in doubt, please refer to the market conduct obligations applicable to your type of organization.  

This guide covers the following topics:

  • complaint-handling procedures
  • aggregate complaints
  • reportable compliance issues
  • reporting on market conduct practices

3. FCAC’s use of mandatory reporting information

FCAC uses the information provided to monitor PCNOs’ compliance with their market conduct obligations and determine appropriate promotion, supervision and/or enforcement actions.

The data received serves additional functions, including but not limited to:

  • promoting the adoption by PCNOs of policies and procedures in line with their market conduct obligations
  • enhancing FCAC’s ability to supervise PCNOs , assess market conduct risk and manage relationships
  • prompting PCNOs to gather key details that will aid in their own internal investigations and in analyzing the root causes of potential breaches
  • triggering improvements to PCNOs ’ control frameworks, which can lead to stronger compliance programs and reduce the likelihood of recurring breaches
  • assisting FCAC in monitoring and evaluating trends and emerging issues that may have an impact on financial consumers and merchants
  • identifying issues that are common to the industry and require further guidance for PCNOs , in the form of FCAC’s guidance and compliance bulletinsFootnote 1 
  • identifying opportunities for policy discussions and collaboration with other government agencies, regulators and stakeholders to foster a better understanding of financial services and related issues

4. Complaint-handling procedures

PCNOs and code participants must have procedures in place to handle complaints from their merchants about their products and services. Element 13 of the Code of Conduct for the Credit and Debit Card Industry in Canada (the code) states that:

  • PCNOs’ rules must include a requirement that merchants have access to a clear dispute resolution procedure to resolve complaints on the code
  • merchants should first report their code-related complaints to their acquirerFootnote 2 
  • the acquirer must investigate the complaint and provide a substantive response to the merchant within 90 days of receiving the merchant complaint
  • if the procedure is exhausted and a satisfactory resolution is not achieved , the merchant may submit their complaint to the PCNO
  • the PCNO will investigate any complaints received and will work with their participants to find an appropriate resolution, communicating the outcome of its investigation directly to the merchant, with a copy to the acquirer, within 45 days of receiving the complaint

Therefore, acquirers must have an internal dispute resolution procedure in place to handle code-related complaints from merchants. In cases where processing companies are sponsored by acquiring banks, the obligation for establishing the complaint-handling procedure in the first step of the process will rest with the processor, not the acquiring bank.

The code refers to the Commissioner’s Guidance CG-12, which states the dispute resolution procedure must be based on the following guiding principles:

  • effectiveness
  • efficiency
  • accountability

See FCAC’s Commissioner Guidance CG-12 for more information on best practices for establishing an internal complaints-handling procedure.

All disclosures provided under the code to merchants must be presented in a clear, simple and non-misleading manner. This includes communication with merchants concerning responses on code-related complaints.

New PCNOs must file their complaint-handling procedure with FCAC within 60 days of adopting the code. When an amendment to its procedure has been made, FCAC expects PCNOs to refile a copy of their complaint-handling procedure.

Complaint-handling template

FCAC, in consultation with the PCNOs and code participants, created a common template to facilitate the submission of a merchant complaint. The template must be used by PCNOs and acquirers, and be posted prominently on their respective websites. This template can be found under Common complaint-handling template for payment card network operators and acquirers (PDF, 93 KB).

For more information on the complaint-handling procedure obligations, please refer to Element 13 of the code.

Additional resources

The following resources may assist PCNOs and code participants in further understanding their obligations related to the complaint-handling procedure:

5. Aggregate complaints report

A reportable complaint is a complaint involving a market conduct obligation (i.e. a legislative provision, a voluntary code of conduct or a public commitment), that has been received by, or forwarded to the PCNO.

FCAC reviews aggregate complaints from PCNOs. That said, each PCNO must record the findings of its investigation of every merchant complaint related to a market conduct obligation. Relevant legislation does permit FCAC to request detailed information on individual complaints.

Aggregate complaints report template

PCNOs must report complaints received or forwarded to them, and do so using the template Reportable complaints aggregate report.(PDF, 182 KB).

The aggregate complaints report contains a section for “nil” reporting to be used as applicable.

A reportable complaint must be forwarded to FCAC even though:

  • the merchant has also contacted FCAC
  • the merchant is satisfied with the outcome of the complaint
  • the complaint was received internally by the PCNO but then sent to a lower level of the complaint-handling procedure for response or resolution
  • the complaint was received by the PCNO as indicated in the complaint-handling procedure and was resolved directly
  • the PCNO concluded it had complied with its obligations to merchants

For more information on the issues that must be reported to FCAC, please refer to the following.

Deadlines to file the aggregate complaints report

Below are the deadlines to file complaints reports to FCAC each quarter in an aggregate format (i.e. the number of reportable complaints received, classified in relation to each relevant market conduct obligation):  

  • For quarters 1 and 2, from April 1 to September 30, the deadline is December 30
  • For quarter 3 and 4, from October 1 to March 31, the deadline is June 30

6. Reportable compliance issues

According to section 5 of FCAC’s Supervision Framework, PCNOs must submit reportable compliance issues to FCAC.


A reportable compliance issue must meet the following three criteria:

Criterion 1: The issue must be a breachFootnote 3  of a market conduct obligation.

Criterion 2: The issue would normally be reported to or identified by the PCNO.

Criterion 3: The issue meets, at a minimum, one of the following:

  • once detected by the PCNO or the code participant, it took longer or will take longer than 120 calendar days to fixFootnote 4   and remediateFootnote 5  the issue; or
  • the issue affected or affects more than 250 consumers or 5 merchants;Footnote 6  or
  • the issue was or is ongoing for more than 1 year before the code participant or the PCNO detected it

The compliance issue may have been identified through various means including, but not limited to:

  • internal audits
  • compliance or control reviews
  • process or product design review
  • a system change/enhancement
  • a consumer or a merchant complaint

If a compliance issue has already been reported to FCAC through the normal reporting of a reportable complaint, it should still be reported as a reportable compliance issue and linked to the initial report.

A reportable compliance issue must be reported to FCAC even though:

  • consumers or merchants were not affected financially
  • consumers or merchants were already remediated
  • the issue was caused by an individual employee

Required use of reportable compliance issue template  

Each compliance issue must be reported to FCAC using Reportable compliance issues summary report (PDF, 827 KB).

Deadline to file reportable compliance issues

PCNOs must submit any reportable compliance issue within 60 calendar days of the compliance issue being identified or reported.

7. Reporting on market conduct practices

According to the code, PCNOs must review, at least every three years, the market conduct practices of all merchant-focused agents,Footnote 7  registered by acquirers with the payment card networks, in the context of the code. PCNOs and code participants must report the results of these reviews to FCAC on the date set by FCAC for the review period.Footnote 8

Results of each PCNO’s three-year market conduct review must be provided to FCAC in spring. As the most recent review was conducted in 2018, the next review is targeted for spring 2021, followed by 2024, etc.

8. Contact FCAC

If you have questions related to your mandatory reporting obligations, please contact FCAC at or the lead FCAC supervisor assigned to your organization. All required reports should be sent to this email address in accordance with the deadlines stated above.

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