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Canadian banks are generally effective at resolving straightforward consumer complaints, but much less effective in handing more complex complaints, according to research released today from the federal government’s Financial Consumer Agency of Canada (FCAC). 

The FCAC was tasked with reviewing bank consumer complaint processes by the Minister of Finance in 2018. The research was conducted between November 2018 and June 2019 and evaluated the effectiveness, accessibility and timeliness of complaint handling at Canada’s six largest banks. It also included a survey of 5,000 Canadians who have a bank account or credit card. The report provided a summary of banks in the aggregate, with no rankings or focus on individual banks. 

The report estimates that more than 5 million consumers bring at least one complaint to a bank each year. Bank procedures are “generally effective, accessible and timely for relatively simple complaints that can be resolved at the first level,” the report said. But when consumers escalate a complaint to higher levels, banks do not have policies and procedures to handle escalated complaints consistently, they do not monitor, assess or improve their procedures, and training programs are largely informal. 

On accessibility – whether consumers know how and where to complain – consumers find it difficult to escalate complaints beyond the first level, and banks do not provide consumers with the information they need to do so. 

On timeliness – whether complaints are resolved within acceptable timelines – most first-level complaints are handled reasonably, but most banks fail on escalated complaints because of inefficient bank procedures that lead to consumer fatigue and consumers dropping complaints before they are resolved. 

The research also found that banks: 

• have inadequate procedures to collect feedback from higher-level complaints. 
• have inadequate procedures to handle complaints objectively. Few have implemented reimbursement policies that provide employees with clear guidelines, and the employees who handle complaints at the first level may not be impartial, because of pressure to make sales and control costs, particularly in the absence of clear policies. 
• fail to set clear parameters on whether and when to consider the business relationship – how long the customer has been with the bank, how large their account is, etc. Complaint resolution sometimes depends on who the consumer is and not on the harm the bank error may have caused. 
• inadequately provide annual training regarding complaint handling.
• require consumers who escalate complaints to higher levels to resubmit complaints, provide documentation a second time, in part because banks do not have reliable record-keeping. 
• routinely fail to advise consumers of their right to take external complaints to their third-party dispute resolver if they are not resolved within 90 days. In fact, some banks have misleading letter templates that suggest consumers cannot do this. 

A parallel report also released February 19 evaluated the effectiveness of external complaint bodies retained by banks.