Bank customers are currently able to refer unresolved complaints
regarding a bank's products or services to an external
complaint body that will seek a resolution impartially. Banks
operating in Canada are already members of such external complaint
bodies. The new regulations seek to entrench standards for the
operation, impartiality and transparency of all external complaint
bodies that provide services in Canada's banking sector. The
regulations include criteria for receiving and maintaining
Ministerial approval to act as an external complaint body. They
also establish certain service standards for such bodies, including
a requirement to issue final written recommendations to parties to
a dispute within 120 days after the proper referral of
The Federal Consumer Agency of Canada
The Financial Consumer Agency of Canada Act (Canada) has been
amended to expand the role of the Federal Consumer Agency of Canada
(FCAC) to include oversight of the regulation of customer
complaints and the activities of external complaint bodies. The
FCAC has published an Application Guide for External Complaint
Bodies for use by entities seeking to serve that role.
Impact for Banks
Banks in Canada already have dedicated procedures and personnel
for addressing customer complaints, in accordance with industry
standards and legislation and regulations currently in effect. As a
result, banks are generally well positioned to meet the new
regulatory requirements. The new regulations do set out standards
for information disclosure to ensure consistency across the banking
sector. This includes providing certain information regarding their
complaints procedures and external complaints bodies to its
customers as well as annual public disclosure regarding complaints
addressed internally by the bank.
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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The Canadian Office of the Superintendent of Financial Institutions ("OSFI") recently ruled that a bank cannot promote comprehensive credit insurance ("CCI") within its Canadian branches under the Insurance Business (Banks and Bank Holdings Companies) Regulations (the "Regulations").
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