Consultation on proposed FCAC guidelines for banks launched ahead of new consumer protection framework taking effect next year
In light of the implementation of a new Financial Consumer Protection Framework (FPCF) in the Bank Act set to take effect next year, the Financial Consumer Agency of Canada (FCAC) has launched a consultation on a new set of guidelines for banks’ complaint-handling processes.
The proposed guideline sets out the FCAC’s expectations with respect to banks and authorized foreign banks’ implementation of new complaint-handling provisions specified in the FPCF, which introduces new or enhanced measures to further empower and protect consumers in their bank dealings.
“The Guideline sets out clear principles and expectations that banks should use when developing their policies and procedures to ensure they deal with consumer complaints promptly, consistently, and in a manner that is easy for consumers to navigate and understand,” the agency said in announcing the proposal.
The FPCF, which is set to take effect in June next year, was informed by reports the FCAC published in 2017 and 2018, which reviewed best practices in consumer protection regimes across different jurisdictions and looked at domestic banks’ sales practices. The agency followed up on that work in 2019 with a review of banks’ complaint-handling procedures, and used the findings to develop its proposed guideline.
As part of the new legislative and regulatory requirements, banks will be required to:
- Establish complaint-handling policies and procedures that satisfy the commissioner of FCAC;
- Deal with each complaint within 56 days following the day it is received;
- Designate an officer or employee in Canada to implement complaint-handling policies and procedures;
- Designate officers or employees in Canada to receive and deal with complaints;
- Refrain from using misleading terms with respect to complaint-handling procedures, including any term that suggests that the procedures, officers or employees are independent of the bank (e.g., “ombudsman”);
- Create records of all complaints and retain them for 7 years; and
- Report quarterly to FCAC regarding complaints that their designated employees or officers receive during the quarter.
“FCAC expects banks to review and revise their policies and procedures to ensure compliance with the applicable consumer provisions under the Bank Act and applicable regulations,” the FCAC said. “In addition, banks should be guided by the principles and expectations detailed in the Guideline when establishing their complaint-handling policies and procedures.”
The consultation is open to all interested parties until December 11.
