Protection for consumers of financial services across Canada is generally strong but there are things that could be improved.
That’s one of the key takeaways from a new report published by the Financial Consumer Agency of Canada (FCAC) which looks at best practices across the provinces, in response to a request from the Minister of Finance.
Overall, Canada’s federal financial consumer protection framework is strong but there are areas that could be strengthened including addressing certain business practices, better supporting the supervisory and enforcement work of the agency with additional tools and introducing targeted measures to better empower and protect consumers.
The report suggests that FCAC’s proactive approach to supervision of financial consumer protection means that it can seek to address issues swiftly, whereas provincial and territorial regulators are largely reactive with monitoring and enforcement actions mainly resulting from incoming complaints.
It also highlights that in most provincial-territorial regimes, the agencies tasked with oversight of financial consumer protection have a broader remit covering other consumer protections with a regulator overseeing market conduct.
Regional legislation is also often broad, rather than specifically covering consumer protection relating to financial services and products. This differs from the federal model where protective laws are specific to the financial services industry.
Not that the federal model does everything better
Some provinces and territories are offering consumers access to third party mediation services as well as dispute resolution systems, whereas the federal system does not have a mediation route.
Regional consumer protection regulators also have the power to compel businesses to comply with decisions and how they must do so. FCAC says this is not currently a tool that it has at a federal level.
Nor does it have the breadth of powers relating to misleading advertising and marketing of financial services and products.
FCAC’s report also considered best practices internationally with some jurisdictions using principle-based consumer protection regimes, compared to the rules-based systems used by Canada’s federal and regional regulators.
The most notable differences between the provincial-territorial jurisdictions, international standards and the federal framework are in the areas of access to redress and remedies, and the prohibition of unfair practices. Some of these elements could be introduced in the federal scheme to further enhance the financial consumer protection framework.
The full report is available at Canada.ca
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