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Minister Morneau takes welcome first step to fix banking dispute resolution

Nov 23, 2018 12:00 PM

The Consumers Council of Canada welcomes a measure in the federal government's Fall Economic Statement signalling the government heard consumer opposition to unfair banking dispute rules: banks should not be able to choose their own referees in disputes with their customers.

In the Fall Economic Statement, on behalf of the government, Finance Minister Bill Morneau s announced “the Financial Consumer Agency of Canada will conduct a review by June 2019 to assess banks’ complaints handling processes and the effectiveness of the external complaints bodies.” 

This review follows calls from the three consumer groups to end a system that pressures external dispute resolution firms to rule in the banks' favour by forcing them to compete for banks' business. 

While the Council welcomes this progress, this review must lead to a solution to provide Canadians with access to a dispute resolution provider that:

  1. Meets international standards
  2. Is independent and governs in the public interest
  3. Is not-for-profit
  4. Has the authority and mandate to resolve all consumer banking complaints and the ability to identify systemic issues

Adhering to these principles requires a single, not-for-profit organization to act as the ombudsman for the retail banking sector across the country. This had been de facto the status quo in Canada until a growing group of Canada's major banks, enabled by a change of approach in federal law and regulation, stopped recognizing or funding Ombudsman for Banking Services and Investments to resolve consumer disputes.

"Bank customers deserve and require access to an unbiased resolution process when they have a dispute with their bank," said Don Mercer, President of the Consumers Council of Canada "The federal government needs to protect bank customers by mandating a single impartial, non-profit external complaints body – a right that should be restored to them promptly."

To serve Canadians, this review must reform a broken external complaints system that denies Canadians access to a single non-profit, independent dispute resolution provider.

The Council, in cooperation with FAIR Canada and Canadian Association of Retired Persons, urges Canadians to share their views with theirMembers of Parliament about their experiences resolving disputes with banks and to demonstrate their support for a fair system of dispute resolution. Learn more about the initiative and how to participate.

 

Public Statements, Financial Services, Savings & Investment, Right-Redress  


  

 

 
 

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