Mandatory reporting guide for payment card network operators
October 30, 2024
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.
- Learn more about the laws that govern your organization
- Learn more about the voluntary codes of conduct that govern your organization
- Learn more about the public commitments that govern your 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 or related to the implementation of voluntary Codes of Conduct or public commitments, 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, Acquirers and Downstream Participants must have a clear, simple, and transparent complaint handling process in place that investigates code-related complaints from merchants in a timely manner. The Code of Conduct for the Payment Card Industry in Canada (Code) states that:
- Acquirers may delegate responsibility for this complaint handling to their Downstream Participant, provided that the complaints are included in the Acquirer’s reporting to PCNOs;Footnote 2
- merchants are provided information about how and where to make a complaint;
- adequate Code training is in place for all applicable employees;
- a summary of the complaint handling process is posted prominently on the Acquirer and/or Downstream Participant’s website;
- the process of making and investigating a complaint is easy for complainants to access and understand;
- accountability for complaint handling within the PCNO, Acquirer, and Downstream Participant is clearly established, and complaints and responses are monitored and reported to management; and,
- complaints are acknowledged within a maximum of 5 business days; investigated and addressed within a maximum of 20 business days (30 business days for PCNOs) according to order of urgency; and the complainant is kept notified and informed throughout the process. If a response cannot be provided within 20 business days (or 30 business days for PCNOs), the merchant must be informed of the reason for the delay and the expected response time.
Acquirers and/or Downstream Participants must investigate all complaints within a reasonable time and provide a substantive written response to merchants that consists of either an offer to resolve the complaint or a denial of the complaint with reasons.
A merchant must be provided the following promptly after their complaint has been investigated and addressed:
- a summary of the complaint;
- the final result of the investigation;
- the final decision, including an explanation; and,
- information on how to further escalate a complaint to the relevant Acquirer or PCNO(s) (as appropriate) in the event of an unsatisfactory outcome, along with the complaint handling form (i.e., if the Acquirer and/or Downstream Participant’s complaint handling process is exhausted and a satisfactory resolution is not achieved, the merchant may then submit the complaint to the relevant Acquirer or PCNO(s), as appropriate).
PCNOs must investigate all merchant complaints received from Acquirers, Downstream Participants, FCAC, or directly from merchants, and work to find an appropriate resolution. A PCNO must communicate the outcome of its investigation directly to the merchant, and provide a copy to the Acquirer and Downstream Participant, within 30 business days of receiving the complaint.
Nothing in the above process restricts the merchant from filing complaints directly with FCAC at any stage of the complaint process. Although FCAC does not act as a complaint resolution body, FCAC may open an investigation to determine if the issues identified in a merchant complaint reflect a PCNO’s non‑compliance with Code obligations.
All disclosures and communications required under the Code, whether provided in writing or digitally, must be presented in a clear, simple and non-misleading manner. This includes communication with merchants concerning responses on Code-related complaints.
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/or Downstream participants, and 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 the Code of Conduct for the Payment Card Industry in Canada.
5. Aggregate complaints report
A reportable complaint is an expression of dissatisfaction, whether justified or not, 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.
On a semi-annual basis, PCNOs must be informed of all Code‑related complaints received by Acquirers and their Downstream Participants, including the market conduct obligations, the outcome of the complaints (resolved or denied with reason), and whether the complaints were escalated or referred to the Acquirer and/or PCNO by a merchant, Code participant or FCAC. The PCNOs must report the above information to FCAC on a semi-annual basis.
In adopting the Code, PCNOs agree to provide to FCAC any information it requires regarding actions taken by themselves, Issuers, Acquirers, or Downstream Participants for the purpose of monitoring ongoing implementation of the Code. FCAC reviews aggregate complaints from PCNOs; however, relevant legislation permits FCAC to request detailed information on individual complaints.
If a complaint is identified as a reportable compliance issue, it is the responsibility of PCNOs to report this information using the appropriate form within 60 days of identifying the issue, as per FCAC’s Supervision Framework.
Aggregate complaints report template
PCNOs must report the required complaints information to FCAC , using the following template Reportable complaints aggregate report.(PDF, 182 KB).
A reportable Code-related complaint must be forwarded to FCAC even if :
- the merchant has also contacted FCAC
- the complaint was resolved or denied with reason
- 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 Acquirer and/or PCNO as indicated in the Code complaint-handling process and was resolved directly
- the PCNO concluded it had complied with its obligations to merchants
The aggregate complaints report contains a section for “nil” reporting, to be used only as applicable.
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 quarters 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.
Definition
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 or 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 if:
- 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. Contact FCAC
If you have questions related to your mandatory reporting obligations, please contact FCAC at compliance@fcac.gc.ca 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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