The Financial Consumer Agency of Canada (FCAC) published a report on its review of the complaint-handling procedures of small and medium-sized banks, which are more likely to encounter issues with implementing the new requirements under the financial consumer protection framework.
In its news release, FCAC said it chose six small to medium-sized banks that offered representative samples of size, business model, and regional presence.
FCAC accepted that the banks assessed devoted efforts to comply with the new requirements for handling complaints under the financial consumer protection framework.
However, FCAC’s review identified multiple improvement areas. Specifically, it found instances where the banks failed to deem all expressions of consumer dissatisfaction as complaints, failed to address complaints within the required 56-calendar-day period from receipt, and submitted complaint records lacking required information.
FCAC told the banks assessed about the findings applicable to them and required them to correct any deficiencies. FCAC plans to keep track of the institutions’ compliance with the complaint-handling requirements.
FCAC said it expected all federally regulated banks to review their complaint-handling procedures to ensure compliance with the relevant requirements and promptly address any issues.
“Effective and timely complaint handling is a cornerstone of trust in our financial system,” said Shereen Benzvy Miller, FCAC commissioner, in the news release. “That’s why I expect all banks to resolve complaints within the required timeframe and support consumers throughout the process.”
Context of review
FCAC’s news release provided more background regarding the recent review. In 2020, FCAC released a report on its prior evaluation of banks’ complaint-handling processes.
In 2022, the Canadian government introduced the new framework in an effort to fortify the complaint-handling rules and make the pertinent procedures more effective, timely, and accessible for consumers.
FCAC noted that the framework comprised over 60 new and improved consumer protection measures, informed by the 2020 report’s insights. These measures included:
- requiring banks to consider all consumer expressions of dissatisfaction with a bank product or service a complaint
- imposing a 56-day timeline for banks to tackle consumer complaints
- enabling consumers to escalate their complaints to the Ombudsman for Banking Services and Investments if banks failed to comply with the prescribed period
“FCAC will continue to actively supervise and enforce compliance with these important consumer protection measures, and with all the obligations under the Financial Consumer Protection Framework,” Miller said in FCAC’s news release.
The FCAC said it seeks to safeguard Canadians by strengthening their financial literacy and supervising the compliance of federally regulated banks and other financial entities with their codes of conduct, public commitments, and complaint-handling and other legislative obligations.