Canada: Record Retention Issues – Information Sharing With External Complaint Bodies And Tolling Agreements

With the proliferation of emails and other electronic documents, many federally regulated financial institutions (FRFIs) are updating their record retention policies to manage their documents. These policies need to take into consideration (1) the sharing of documents relating to customer complaints with external complaint bodies (ECBs); (2) the tolling agreements that most FRFIs are entering with their ECBs; and (3) the new Complaints (Banks, Authorized Foreign Banks and External Complaints Bodies) Regulations (the New Regulations) which came into force on September 2, 2013, and which impose additional obligations on banks and authorized foreign banks (Banks) regarding customer complaints (see our April 2013 Blakes Bulletin: Update: Final Complaints Regulations Published Plus New FCAC Guidance).

SHARING OF DOCUMENTS WITH ECBs

All FRFIs are required to have internal procedures in place to deal with customer complaints. In connection with their complaint-handling procedures, most FRFIs are also members of an ECB. (Currently, there are two ECBs serving the financial services industry in Canada, other than in respect of insurance: the ADR Chambers Banking Ombuds Office and the Ombudsman for Banking Services and  Investments, and two ECBs serving the insurance industry in Canada: the OmbudService for Life and Health Insurance and the General Insurance OmbudService.) Federally regulated trust and loan companies, insurance companies and retail associations are currently required to be a member of an ECB pursuant to their governing statutes. Banks are not currently required to be a member of an ECB but this will change once Bank Act amendments come into force and one or more ECBs are approved under the Bank Act (discussed below). In practice, most Banks are already members of an ECB.

Typically, FRFIs will first try to address a customer complaint themselves but if the customer is not satisfied with the FRFI's response, the customer may make a complaint to the ECB of which the FRFI is a member. Once a customer makes a complaint to an ECB, he or she is required to sign a consent letter that gives the FRFI permission to share information with the ECB so that the ECB can investigate the complaint.

When a complaint is made to an FRFI, the FRFI should implement a legal hold to ensure that all relevant documents are retained until the legal hold is lifted. Normally a legal hold will be lifted once the limitation period has passed or, if an action is brought, once the action is finally disposed of. The relevant documents should be retained even if the documents are provided to another department of the FRFI (such as the internal ombudsman's office) or the FRFI's ECB. An ECB is not an FRFI's record-keeper and FRFIs should not assume that an ECB will keep a copy of documents provided to it.

TOLLING AGREEMENTS AND ECBs

In addition to the above, most customers who make a complaint to an ECB are covered by a blanket tolling agreement (other than those complaints brought in Quebec, as the law in Quebec does not permit tolling agreements, which are also not typical in the general insurance industry). This tolling agreement is an agreement signed by most FRFIs and provided to the ECB that confirms a suspension of the limitation period for all complaints that come before the ECB. Tolling agreements vary by ECB and industry, but the limitation period is typically suspended starting from the date that the FRFI receives a copy of the consent letter signed by the client, and ends a certain number of days after the ECB sends its final report to the customer, or after the file is closed for any reason. The applicable limitation period begins to run again once the tolling agreement expires.

The existence of a tolling agreement does not alleviate FRFIs from their record retention obligations. On the contrary, a tolling agreement prolongs an FRFI's retention obligation. If the limitation period for a complaint is suspended as a result of a tolling agreement, the retention period for the information relating to that complaint must be extended until after the tolling agreement has ended and after the applicable limitation period has ended, or until the matter has been resolved if an action has been commenced. FRFIs need to implement a process to ensure that these tolling agreements are taken into account when determining the appropriate retention period for documents.

Failing to comply with proper record retention requirements, including the extended retention period that would be required if a tolling agreement was in place, could put an FRFI at risk of facing a claim of intentionally or negligently destroying evidence (known as spoliation), not having documents to support its case, or having a court draw adverse inferences against it for not having the required documents.

BANK ACT AMENDMENTS AND THE NEW REGULATIONS

Amendments to the Bank Act that came into force on September 2, 2013 establish an approval process for ECBs by the Minister of Finance and require each Bank be a member of an ECB once one or more are approved. As noted above, the New Regulations also came into force on September 2, 2013. The New Regulations impose additional obligations on Banks regarding customer complaints and govern ECBs. Monitoring and enforcement in relation to ECBs will be carried out by the Financial Consumer Agency of Canada (FCAC).

It is expected that the existing ECBs will seek the Minister's approval in order to be an approved ECB for the purposes of the Bank Act. The FCAC began to accept notifications of interest from potential applicants seeking approval as an ECB on September 2, 2013.

One of the requirements of the New Regulations is that a Bank must provide its ECB with all information in its possession or control that relates to a complaint without delay after the ECB notifies the Bank that a complaint has been received. The New Regulations do not impose a requirement on ECBs to retain such information or to return it to the Bank. Therefore Banks should retain copies of all documents provided to their ECB. Banks will remain responsible for retaining documents in accordance with their record retention policy and taking into account limitation periods, as extended by any applicable tolling agreement. We assume that the tolling agreements will remain in place following the implementation of the New Regulations and related Bank Act amendments.

As a reminder, Banks should review their complaints procedures to ensure that they comply with the requirements set out in the New Regulations as well as the new minimum standards outlined in the Commissioner's Guidance published by the FCAC – CG-12 Internal Dispute Resolution, which also takes effect on September 2, 2013.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
12 Nov 2018, Other, Toronto, Canada

Stories aren’t falsehoods. Stories are the root of all effective human communications: they motivate, animate and clarify. If you aren’t telling stories, you probably aren’t getting your point across.

14 Nov 2018, Speaking Engagement, Ontario, Canada

Join members of the Blakes Environmental and Enterprise Risk & Crisis Response groups for a discussion of hot topics and trends in Canadian environmental law.

15 Nov 2018, Webinar, Toronto, Canada

Join us for a live webcast with partners from our Employment & Labour and Litigation & Dispute Resolution groups as they discuss employment-related challenges and considerations surrounding the recent legalization of recreational cannabis in Canada.

 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions