FCAC seeks single body for bank complaints

A federal government pledge to introduce a single external complaint-handling body for the banking sector is one step closer, with the Financial Consumer Agency of Canada (FCAC) calling for candidates.

In its latest budget, the government indicated that the FCAC would be recruited to identify the organization to serve as the lone external complaint-handling body — a role that is currently divided between ADR Chambers Banking Ombuds Office and the Ombudsman for Banking Services and Investments (OBSI).

That arrangement has long faced criticism from consumer advocates. A review in early 2020 by the FCAC recommended reforms to industry complaint handling, and said the multiple-provider model introduced needless inefficiencies and complexity into the system, and falls short of international standards. The latest independent reviews of OBSI and ADR also called for reform.

“Consumer protection is enhanced when financial consumers have access to a fair and effective external dispute resolution system,” said Judith Robertson, commissioner with the FCAC, in a release on Thursday. “The process must be easy for them to use, include the timely resolution of their issues, and not permit banks to choose the external complaints body they participate in.”

“Designating a single non-profit external complaints body will simplify complaints handling in banking and is in the best interests of Canadians,” she added.

The FCAC has begun the formal process of seeking applications for the job. Submissions are due by June 26.

“Applicants are expected to clearly articulate how they meet the requirements to effectively serve as Canada’s single [external complaint-handling body],” it said.

After reviewing the applications, the FCAC will make a recommendation, but the decision on the single external complaint-handling body will come from the minister of finance.

“This is an important first step in our plan to establish a single not-for-profit external complaints body, which will enhance the confidence and trust that Canadians have in our financial system,” said Chrystia Freeland, deputy prime minister and minister of finance, in a release.

Earlier this month, a group of advocates headed by FAIR Canada called on the government to select OBSI as the single external complaint-handling body.

“OBSI is a well-established, non-profit, independent organization that has been providing dispute-resolution services to Canadian financial consumers for over 25 years,” the group said in a letter to the government. “Selecting OBSI over a different entity would serve the public interest by minimizing uncertainty and disruption for complainants.”

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.