Bill C-86, Budget Implementation Act, 2018, No. 2 (Bill), was assented into law in Canada in December 2018 [1]. The bill contains the Financial Consumer Protection Framework (FCPF), which was a consolidation of new and improved provisions aimed at boosting consumers’ trust levels in the financial system. To ensure fair treatment of consumers, the bill introduced a robust new complaints system. This system sought to significantly increase the responsibilities of banks and other authorized financial institutions in regard to handling complaints received from consumers.

Lack of proper maintenance of complaint records weakens a financial institution’s ability to identify trends and work on possible remedies to the identified root causes.

Banks and financial institutions are required to establish a robust framework outlining all the procedures taken when handling customer complaints, satisfactory to the Commissioner of the Financial Consumer Agency of Canada (FCAC) for dealing with complaints within a prescribed period. The complaints handling framework should summarize how complaints are logged, who will be handling the complaints, and avail this information on their websites. Additionally, an employee or officer designated in Canada will be responsible for implementing these procedures. Banks and authorized foreign banks will also need to have one or more designated employee(s) or officer(s) located in Canada to receive and deal with all the complaints.

Each year, banks and financial institutions also have to provide on their websites, and in a written report to anyone who requests it, the information regarding the nature and number of complaints handled by their designated employees or officers. Also, the average length of time taken to resolve complaints, the number of complaints resolved by a designated employee or officer to the satisfaction of the person who made them, and any additional information prescribed by regulation that may be required.

Also, within 60 days after the end of every quarter, each bank or financial institution will make quarterly report submissions to the Commissioner, regarding every complaint received by a designated employee during that quarter, by supplying a copy of the complaint record. Banking institutions are required to maintain the complaint records containing prescribed information for a minimum of seven years [2].

The new provisions in Bill C-86 provide complaint documentation protocols. These procedures will dramatically improve the customer service operations of banking and financial institutions by allowing them to collect more information to analyze and identify patterns and other important insights.

According to Bill C-86 [3], “Complaint” is primarily defined as meaning dissatisfaction, regardless of whether it is justified or not, conveyed to a banking institution concerning: a. A product or service in Canada that is offered, sold, or provided by the banking institution Or b. How a product or service in Canada is offered, sold, or provided by the banking institution The financial institution shall provide a person who makes a complaint with:

• written acknowledgment of the date on which it received the complaint
• its procedures (along with supporting information) for dealing with complaints
• name of the external complaints body (FCAC) of which it is a member and the manner in which that body may be contacted
• its mailing address, website address, and telephone number

Each copy of the complaint record submitted to the Commissioner of Financial Consumer Agency of Canada must have the following information:

• If the complaint was made in writing
• The original version of the complaint (recording or transcript, or written details if the complaint wasn’t recorded)
• If the complaint was made orally
• The name of the person who made the complaint.
• The name of the person who requested or received the product or service to which the complaint relates
• The contact information provided by the person who made the complaint
• The date on which the institution received the complaint
• A description of the nature of the complaint and the product or service to which it relates.
• The date on which the complaint was resolved if, in the institution’s opinion, it was resolved to the satisfaction of the person who made the complaint.
• A description of any actions that the institution took to attempt to resolve the complaint
• A description of any compensation provided to the complainant
• Confirmation that the institution provided the complainant information about its procedure for dealing with complaints
• Any other information which may be prescribed by regulation

The procedures in Bill C-86 [5] were introduced after the Domestic Bank Retail Sales Practices Review. The FCAC found that although banks and financial institutions already had a good customer service system that resolved about 90-95% of all customer complaints at the first point of contact, such complaints were mostly not recorded.

In addition to the new, improved requirements applicable to banks and other financial institutions, such as authorized foreign banks, external complaints bodies, in addition to ongoing obligations for maintaining an approval to act as such for banks and other financial institutions, will also have to undergo a more robust approval process from the Minister, on the recommendation of the FCAC Commissioner.

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*This article was written with the assistance of ChatGPT. The ideas and content are our own, however, the GPT-4 model was used to compile and structure the content.

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