Canada has introduced a streamlined complaints process for banking customers, designating the Ombudsman for Banking Services and Investments (OBSI) as the sole external complaints body (ECB) for all federally regulated banks. This move, announced on Friday, aims to simplify and strengthen consumer protections in financial disputes.
The Financial Consumer Agency of Canada (FCAC) oversees this transition, recommending OBSI as the sole ECB. This follows findings from FCAC’s 2020 report, highlighting issues with multiple complaint resolution providers. The report noted that this led to delays and additional hurdles for consumers seeking resolutions.
Deputy Prime Minister and Finance Minister Chrystia Freeland officially designated OBSI as the single ECB in October 2023. All federally regulated banks that previously used the ADR Chambers Banking Ombuds Office (ADRBO) are now required to transfer to OBSI.
A news release noted that the Royal Bank of Canada, TD Bank, Scotiabank, National Bank of Canada, Tangerine Bank, and Digital Commerce Bank have now transferred to OBSI. ADRBO, which has served as an ECB for several banks over the years, will complete handling its remaining open cases before entirely exiting the complaints system.
“Canadians now have a simpler and fairer complaint handling system,” said Werner Liedtke, interim commissioner of FCAC. “FCAC’s strong and effective supervision of complaint-handling in banking protects consumers and enhances trust and confidence in financial institutions and the financial system.”
Increased consumer protection
The consolidation aims to strengthen protections for financial consumers under the Financial Consumer Protection Framework established in June 2022, according to the news release. Under these new regulations, banks must process customer complaints within 56 days. If a complaint remains unresolved, consumers may escalate it to OBSI, which has 120 days to review and recommend a resolution.
OBSI, a not-for-profit and independent organization, has served Canadian consumers in financial disputes for over 25 years. As the sole ECB, OBSI’s mandate is to provide fair and impartial reviews of unresolved banking complaints. The FCAC will continue to monitor banks’ compliance with the complaint-handling procedures.
The news release also noted that consumers may submit complaints directly to the FCAC, though the agency does not resolve individual cases. Instead, the FCAC collects data from complaints to inform supervisory actions and identify trends that may influence financial policy and consumer protection efforts in Canada.
In a 2023 budget announcement, the government reiterated its commitment to improving consumer protections in banking by establishing a single, independent, and not-for-profit ECB through a rigorous application process managed by the FCAC.