Canadians now have a single external complaints body for banking

From: Financial Consumer Agency of Canada

News release

Ottawa

November 1, 2024

Today, the Ombudsman for Banking Services and Investments (OBSI) assumed its responsibilities as Canada’s single external complaints body (ECB) for federally regulated banks.

As part of its mandate, the Financial Consumer Agency of Canada (FCAC) protects consumers of financial products and services by supervising the compliance of federally regulated banks and the ECB with their legal obligations, including the right of consumers to a fair, timely and accessible complaint-handling process.

The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, designated OBSI as Canada’s single ECB in October 2023. The Minister made this designation based on the recommendation of FCAC.

All federally regulated banks must now be members of OBSI. Previously, Canadian banks could choose between one of two ECBs: the Ombudsman for Banking Services and Investments (OBSI) or the ADR Chambers Banking Ombuds Office (ADRBO). The six Canadian banks that previously used ADRBO (Royal Bank of Canada, TD Bank, Scotiabank, National Bank of Canada, Tangerine Bank, and Digital Commerce Bank) have now transferred to OBSI. ADRBO will complete the investigation and resolution of complaints that it received and that remain open as of November 1. FCAC recognizes the important role played by ADRBO while acting as an ECB for several years.

The move to a single ECB addresses findings from FCAC’s 2020 report on the Operations of External Complaints Bodies, which concluded that consumers face delays and complications when escalating their banking complaints.

Effective complaint handling is a cornerstone of consumer protection. The move to a single ECB is good news for consumers and further strengthens complaint handling in Canada. When combined with the complaint handling requirements introduced under Canada’s Financial Consumer Protection Framework, this change will provide Canadians with a more effective complaint handling system in banking.

OBSI is a national, independent and not-for-profit organization that has been assisting Canadian banking consumers in resolving disputes for over 25 years. As the single ECB, OBSI is responsible for providing a fair and impartial process for consumers whose complaints have not been resolved to their satisfaction or dealt with in a timely manner by banks.

One of FCAC’s key roles is to supervise the complaints-handling system within banks, as banks have a legislative responsibility to handle consumer complaints. Consumers can report their complaints to FCAC, but the Agency does not resolve individual disputes. FCAC uses information from consumer complaints to inform its supervisory activities and monitor trends and issues that may have an impact on financial consumers.

Quotes

“As a result of the move to a single ECB, Canadians now have a simpler and fairer complaint handling system. FCAC’s strong and effective supervision of complaint-handling in banking protects consumers and enhances trust and confidence in financial institutions and the financial system. FCAC looks forward to continuing to work with OBSI as it supports the rights of Canadians to file a complaint about their bank and have access to a free and impartial process to address unresolved complaints.”

Werner Liedtke, Interim Commissioner, Financial Consumer Agency of Canada

Quick facts

The Financial Consumer Agency of Canada (FCAC) supervises the compliance of federally regulated entities, including banks and the ECB, with their legislative obligations, codes of conduct and public commitments and strengthens the financial literacy of Canadians.
An ECB is an organization that is independent from banks and that provides a free and impartial review of consumer complaints about banking services and products. As the single ECB, OBSI can recommend a resolution of a complaint to the consumer and the bank.
All federally regulated banks must have complaint handling procedures and must provide information about these procedures to customers. The procedures must include information on how to escalate a complaint to the ECB. The requirements for federally regulated banks and the ECB are set out in the Bank Act, FCAC Act and the Financial Consumer Protection Framework Regulations.
New and enhanced protections for financial consumers took effect in June 2022, under Canada’s Financial Consumer Protection Framework . They include the requirement that banks deal with customer complaints within 56 days, among other measures to strengthen complaint handling.
Consumers can ask OBSI to review their complaint if it has not been resolved to their satisfaction through a bank’s internal complaints process, or if 56 days have passed since the bank received the complaint.
Once the ECB determines that a complaint falls within its mandate, it has 120 days to make a final written recommendation to the consumer and the bank.
FCAC provides unbiased and authoritative information to financial consumers to help them make informed financial decisions and navigate the financial marketplace. This includes information on how to file a complaint with your financial institution, and how to escalate a complaint with your bank to the external complaints body.
In Budget 2023, the government announced its intention to strengthen the external complaint handling system in banking by designating a single, not-for-profit, body corporate to be the sole ECB, following an application process led by FCAC.

Associated links

Contacts

Media Relations
Financial Consumer Agency of Canada
343-999-1450
media@fcac-acfc.gc.ca

Page details

Date modified:: 2024-11-01