New Oversight of Banking Complaints Introduced

On April 10, 2013, the Honourable Jim Flaherty, Minister of Finance, announced that new measures were being implemented to protect banking customers in Canada and the new rules will come into force soon: on September 2, 2013.

The announcement came shortly after the Government introduced new rules requiring banks to belong to a federally approved external complaints body as well as increasing monitoring and enforcement powers to the Financial Consumer Agency of Canada (FCAC).

Banks in Canada have long been mandated membership in an external complaints body, but there were no clear standards in place for these bodies, and no oversight by the FCAC.

“This new oversight, in tandem with additional compliance monitoring of the complaint system by FCAC, brings needed transparency and rigour to the complaint-handling process, so Canadians can expect faster, more effective recourse when issues arise—for example, an issue with a mortgage—and at no cost to them,” said Minister Flaherty.

The regulations state that financial institutions, banks, and even external complaints bodies must publicize the complaints that they handle every year; this should provide evidence of the effectiveness of the new regulations down the road. With independent complaint bodies and external bodies overseeing all of their actions, it is expected that these new regulations will ensure timeliness and transparency in the consumer complaint process.