“We have been asking for the Department of Finance to ensure independent, fair and expeditious resolution of consumer banking complaints by creating a single ombudsman service for over ten years,” said John Lawford, PIAC Executive Director and General Counsel. “We almost gave up hope, but in the Finance Minister’s Mandate Letter, it directed the Minister to create ‘a single, independent ombudsperson, with the power to impose binding arbitration, to address consumer complaints involving banks.’ So, we are requesting the Minister go ahead and right this historical consumer problem.”

PIAC recently recorded an episode of its “We Fight for That” podcast discussing consumer banking complaints in Canada in detail.

For more information, please contact:

Public Interest Advocacy Centre (PIAC)

John Lawford
Executive Director and General Counsel
Public Interest Advocacy Centre
(613) 447-8125
jlawford@piac.ca

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The CCTC Annual Report shows a 9% year over year increase in consumer complaints during the months of August 1, 2020 to July 31, 2021. Customers raised 12% more Internet-related issues during COVID-19 lockdown, with nearly one quarter of these concerning poor service quality and complete loss of service at a time when Canadians rely on internet services to complete essential activities.

“Increased home internet usage by Canadians during COVID-19 restrictions highlights serious problems with Canada’s Internet industry and regulation,” noted John Lawford, PIAC’s Executive Director and General Counsel. “The CRTC’s ‘Internet Code’ had only 18 confirmed violations despite consumers raising over 13,000 Internet issues – or less than 0.2%,” he added. “That’s a ridiculously low number that we think means the Internet Code has no real substantive consumer protections while consumers are led by regulators and industry to think that it protects them.”

Wireless services continued to be the most complained about service, at 44% of consumer complaints overall, versus 31% for Internet services and 12% each for TV and home phone service. Disclosure issues continue to worsen as they were the top consumer concern (14% of all issues for all service), followed by incorrect charges (13%) and poor quality of service (11%). Within the service quality category, complaints relating to Internet quality of service saw a whopping 48% increase.

PIAC notes that disclosure concerns also are a common issue again this year despite a Canadian Radio-television and Telecommunications Commission (CRTC) Report on Misleading or Aggressive Retail Sales Practices of Canada’s communications providers that clearly described flaws in industry behaviour.

For more information, please contact:

John Lawford
Executive Director and General Counsel
Public Interest Advocacy Centre (PIAC)
613-562-4002 ext. 125 (New)
(613) 447-8125 (cell)
jlawford@piac.ca

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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: <http://www.cbc.ca/news/business/td-bank-employees-admit-to-breaking-law-1.4016569>, 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: <http://www.cbc.ca/news/canada/british-columbia/td-tellers-desperate-to-meet-increasing-sales-goals-1.4006743>.
[2] [2]Posadzki, A. “Banking ombudsman says TD Bank allegations raises ‘serious concerns’”, Toronto Star, March 13, 2017.

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