PIAC comments in favour of a single External Complaints Body for banking services

Recently, PIAC commented on the Department of Finance Canada’s Consultation on Strengthening Canada’s External Complaint Handling System in Banking.

The Consultation was released following two reports by the Financial Consumer Agency of Canada (FCAC): “Bank Complaint Handling Procedures” and “The Operations of External Complaints Bodies” which identified a number of deficiencies in the complaint handling policies, procedures and operations of banks and external complaint bodies (ECBs), organizations that review complaints that are not satisfactorily resolved by a banks internal complaints handling system. Unfortunately, the Consultation did not seek feedback on banks’ internal complaints handling processes, an issue we raise in our comments: “[E]ven the best ECBs cannot be effective tools for consumers if consumer complaints are mishandled or suppressed, intentionally or inadvertently, at the level of the banks’ internal complaint handling processes or consumers agree to inadequate compensation from their bank out of lack of awareness that an ECB option is available.”

Despite the Consultation’s narrow scope, we generally support the government’s efforts to improve the ECB system in banking. In our submission, we ask that the government move away from the current multiple ECB system and towards designating a single ECB to oversee all banking services complaints. In our view, the government will be better able to regulate the ECB system if it designates a single ECB, makes ECB decisions binding on relevant banks, and creates more rigorous accessibility and transparency requirements, including a requirement that the ECB publish all of its decisions.

Read our full submission here