Appearance before the Standing Committee on Finance (July 7, 2020): Complaint handling

Issue

Banks and external complaints bodies (ECBs) may potentially be unable to handle the increase in the number of consumer complaints related to COVID-19, particularly when relief measure programs offered by banks come to an end.

Background

• The 2008 financial crisis led to a significant increase in consumer complaints about investment advice and products. 
• It is expected that the COVID-19 pandemic will likely lead to an increase in complaints about banking products and services, specifically mortgages, loans and credit cards, as many consumers are struggling with loss of income.
• During the industry review on complaint handling, FCAC found that banks were struggling to resolve more complex, escalated complaints in a timely manner.  

Data/Quick facts

• FCAC estimates that over 5 million consumers bring at least one complaint to a bank each year. 
• Banks resolve most Level 1 complaints in a reasonable amount of time.
• However, FCAC observed that four out of six banks were not resolving escalated complaints within FCAC’s 90-day guideline. Three banks were exceeding the 90-day guideline by an average of 50% or more.

Key messages

• When banks provide consumers with access to a fair and efficient process for resolving complaints, it promotes trust and confidence in financial institutions.
• Building on the findings of its industry review of complaint handling, FCAC will supervise the implementation of action plans by banks and ECBs to ensure timely and effective resolution of complaints.
• In addition, FCAC will enhance the guidance provided to industry for internal and external dispute resolution.
• FCAC will collect and analyze data from complaints related to COVID-19 to assess the bank’s response to issues that have impacted consumers due to the pandemic.
• FCAC is working on a reporting strategy to for the number of  COVID-19 related complaints that are escalated through the bank’s internal dispute resolution process and to the ECBs.