In 2014, PIAC submitted an analysis to Finance Canada calling for a comprehensive financial consumer code, as well as the establishment of an ombudsman to address consumer complaints arising under a financial consumer code. We suggested the present Ombudsman for Banking Services and Investments (OBSI) could perform the day-to-day intake of complaints based on the Code, mediate and suggest resolutions to the financial institutions, leaving Financial Consumer Agency of Canada’s (FCAC) role as supervisory, exercising an oversight, systemic enforcement and policy role.

Canadians need a comprehensive financial consumer code and an ombudsman to address consumer complaints arising under such a code.

The financial consumer code, as PIAC envisioned, would be binding upon financial institutions subject to federal Government authority and have the force of law. At the time, we reasoned that “in the absence of a clear, simple to understand standard, consumers – and notably vulnerable consumers – stand at a significant disadvantage when dealing with financial institutions and their employees or representatives.”
As allegations about aggressive sales tactics by TD Bank employees comes to light,[1] PIAC reviewed its 2014 submission. We found the need remains for the creation of a document consumers can point to that outlines clear rules of road for federally regulated financial institutions and consumers.
However, having clear rules is only one piece of the puzzle. Once a document is created, Canadians will expect to have a champion to defend the contents of a financial consumer code. An effective body to adjudicate their concerns, and make public those instances where banks behave badly. On this score, the available evidence suggests the current enforcement approach towards banks in Canada is akin to having referees without whistles.

“the current enforcement approach towards banks in Canada is akin to having referees without whistles.”

In 2014, PIAC expressed concern with the communications approach of the FCAC towards enforcement and compliance issues involving federally regulated financial institutions. We noted the FCAC “is not sufficiently focused upon informing the public” and that “generally, an announcement involving the violation of an act under the authority of the FCAC is posted on the FCAC website. FCAC rarely holds a press conference or communicates directly to the public explaining what occurred that was in violation of an existing statute or regulation.”
Since 2014, PIAC contends the FCAC’s approach to making public any enforcement activity has not changed. It is difficult to recall the last occasion when a federally regulated financial institution was publicly named by the FCAC to be in violation of a statute under its purview. Even in the face of a series of alleged wrong-doings by a leading Canadian financial institution, there have only been e-mail statements by spokespersons. No public statement by the FCAC Commissioner to our knowledge thus far.
Meanwhile, the head of OBSI urged consumers who have encountered such banking issues to file a complaint with their financial institution.
“Financial institutions have 90 days to deal with it, but if they’re still unsatisfied then that’s where OBSI comes in,” Sarah Bradley said. “We’re here to help them resolve those disputes.”[2]
OBSI is an impartial arbitrator to resolve disputes between banks or investment firms and their clients. However, the OBSI is not used as a dispute arbitrator by TD. TD was allowed to move these services to another arbitrator called ADR Chambers Banking Ombuds Office in 2011.
This confusing morass of who is responsible for what complaints is not what Canadians will expect if a financial consumer code is introduced. Canadians will expect a “consumer protection czar” who not only accepts the mantle, but uses it to publicly defend the interests of Canadians when banks behave badly.  
Enter the federal Minister of Finance. PIAC believes Finance Minister Morneau has an opportunity to enhance consumer confidence in the banking sector by introducing the establishment of comprehensive financial consumer code, and a single ombudsman to address consumer complaints arising under such a code. PIAC encourages the Minister to conduct the actions required to make the Financial Consumer Code and the applicable consumer redress regime a reality.
Jonathan Bishop has been a Research Analyst with the Public Interest Advocacy Centre (PIAC) since 2012. He was part of a team that authored PIAC’s 2014 submission to Finance Canada’s Consultation on Canada’s Financial Consumer Protection Framework: Consultation Paper. That submission can be viewed here
[1]Posadzki, A. “Banking ombudsman says TD Bank allegations raises ‘serious concerns”, Toronto Star, March 13, 2017. See also, Erica Johnson, “’We do it because our jobs are at stake’: TD bank employees admit to breaking the law for fear of being fired,” CBC News, March 10, 2017. Online: <>, and Erica Johnson, “’I will do anything I can to make my goal’: TD teller says customers pay price for ‘unrealistic’ sales targets,” CBC News, March 6, 2017. Online: <>.
[2] [2]Posadzki, A. “Banking ombudsman says TD Bank allegations raises ‘serious concerns”, Toronto Star, March 13, 2017.