Canadians were up in arms earlier this year when a regulator’s report into how banks deal with customer complaints was overdue. Mohamed Dabo reports on the damning subsequent review.
The Financial Consumer Agency of Canada’s (FCAC’s) found shortcomings with how Canada’s biggest banks handle consumer complaints.
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The findings were in two reports released by the Financial Consumer Agency of Canada, the federal regulator tasked by the government with reviewing internal bank complaint-handling procedures (CHPs) and the effectiveness of external complaints bodies (ECBs).
The FCAC estimated that more than five million consumers lodge at least one complaint with a bank every year, most of which are dealt with internally and at the first point of contact.
The sweeping review found, however, that both internal and external processes used by the lenders have flaws in them.
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By GlobalDataA number of deficiencies
In addition to unreasonable delays and inadequate training, those shortfalls include concerns about a system that allows banks to choose their external ombudsman.
“Banks do not make it easy for consumers to escalate complaints,” the report noted.
External Complaints Bodies (ECBs)
External complaints bodies (ECBs) are organizations that are independent from the banks and federal credit unions. They deal with customer complaints about banking services and products. All banks and federal credit unions must be a member of one of the ECBs.
The FCAC says it will address the deficiencies via its supervision work and with a new financial consumer protection framework being implemented by the government.
The agency is also to oversee a third-party review of ECB operations later this year.
