The Federal Government has proposed a new regime for the
handling of complaints by customers of banks. While banks are
already required to have a consumer complaints procedure in place
and to be a member of an external complaints body where unresolved
complaints can be referred, the current system has not been
satisfactory to many of the banks or consumers.
The Current Consumer Complaints System
While the vast majority of consumer complaints against banks are
settled based on the internal procedures of each bank, any complain
that cannot be so settled has, in the past, been referred to the
federally appointed Ombudsman for Banking Services and Investments
("OBSI"). On the bank side, two of Canada's banks
made the decision to no longer use the services of OBSI and
instead, hired their own dispute resolution service. On the
consumer side, the complaint was that there was uncertainty as to
the manner in which a complaint would be handled if the internal
The Proposed System
Under the new proposed system, external complaints bodies will
be established to hear consumer complaints. Those external
complaints bodies must be first approved by the Minister of
Finance. The Financial Consumer Agency of Canada ("FCAC")
will administer the approval process for such external complaints
bodies, conduct an in-depth review of external complaints bodies
prior to consideration for the approval by the Minister of Finance
and monitor and enforce compliance with the standard that will be
The Government has proposed new regulations to be known as the
"External Complaints Bodies Regulations"
that will set the standard that external complaints bodies must
meet for approval as well as the obligations of Canadian banks to
use these entities. The proposed regulations are intended to ensure
that external complaints bodies are accessible (consumers will be
guaranteed that complaint handling is easily accessible and
available at no cost); accountable (the external complaints body is
accountable to consumers, banks and the FCAC); independent
(consumers will be provided with an independent and impartial
hearing for their complaint); transparent (information on external
complaints bodies will allow consumers to compare the effectiveness
of the external complaints bodies as their information will be made
available to the public on their operations, membership and
funding); effective (consumers and the resolution of complaints
would be the focus for all external bodies as opposed to a broader
dispute resolution entity); timely (consumers would see complaints
resolved within 120 days as opposed to the current industry
standard of 180 days); and cooperative (banks and external
complaints bodies would be expected to cooperate so the process
The proposed regulations are subject to a comment period.
Stephen Clarks' practice focuses on
financial institutions and corporate finance.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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