The federal Finance department is undertaking a public consultation on the complaint-handling regime of the banking industry.
Finance published a consultation paper that seeks feedback on the structure of the complaint-handling system, as well as on the results of a review of the existing system of external complaint-handling bodies (ECBs) by the Financial Consumer Agency of Canada (FCAC) that was published in February 2020.
Among other things, the FCAC review questioned the approach of allowing competition in the business of compliant handling, which allows banks to chose whether to use one of two approved services: the ADR Chambers Banking Ombuds Office (ADRBO) or the Ombudsman for Banking Services and Investments (OBSI).
“The multiple-ECB model is not consistent with international standards,” the FCAC concluded. “It introduces inefficiencies and increases the complexity of the external dispute resolution system for consumers.”
The regulator also said that it had “concerns about how allowing banks to choose the ECB negatively affects consumers’ perceptions of the fairness and impartiality of the system.”
Along with these concerns, the FCAC also found that consumers “face delays and complications when escalating their complaint […]. Escalation procedures put the onus on consumers to navigate a complex system that is slow and cumbersome, resulting in a significant proportion of these consumers becoming dissatisfied and abandoning their complaint.”
Finance’s review aims to address the findings of the FCAC report, and “determine how to further strengthen the external complaint handling system,” it said.
“Stakeholder feedback will help inform future policy directions for the ECB system in Canada,” Finance concluded.
The consultation runs until Oct. 14.