A year after FCAC report, promise of consultations still unkept

Banking consumer advocate calls out finance ministry for failing to confront conflicted complaint-handling procedures

A year after FCAC report, promise of consultations still unkept

Immediately after the Financial Consumer Agency of Canada (FCAC) released its review of consumer complaints-handling procedures at the Big Six banks in February, the Department of Finance, then led by Bill Morneau, announced that it would “launch public consultations in spring 2020 to address the findings of these reports.”

Four seasons later, those consultations have yet to be started – and one consumer advocate is asking why.

“This avoidance by the [Ministry of Finance] not calling for this public consultation … undermines all trust that banking consumers have in the [ministry] really wanting to see any failures in the FCAC’s [complaint-handling procedures] enforcement operations,” said Peter Whitehouse in a statement provided to Wealth Professional.

While he acknowledged that the government has had other pressing business to attend to because of the COVID-19 pandemic, Whitehouse said he has repeatedly contacted the ministry to ask when they plan to push through with the consultation.

A copy of an email thread provided to WP shows Whitehouse reaching out to numerous leaders at the ministry, including Former Minister Morneau and the current Finance Minister Chrystia Freeland, from July 6, 2020 until December 22, 2020. Apart from an automated response from the associate minister of finance, at no point did the email thread reflect any response to his inquiries.

“Without this public commentary input, there can be no constructive opportunity to expose any shortcomings in the FCAC review,” Whitehouse said in his latest missive sent to this publication.

He noted that in its review, the FCAC acknowledged that the banks used the title “ombudsman” to refer to the most senior employee that they have assigned to handle complaints internally. However, its report instead uses the title “Senior Complaints Officer” (SCO) which it said was to prevent consumers from mistakenly assuming that the employee is separate or independent of the bank – a point of confusion that consumer advocates have repeatedly raised alarms about.

Under internationally accepted ethical operating principles, Whitehouse said, a genuine ombudsman “must be independent of all parties in a dispute.” Bank-appointed internal ombudsmen cannot make genuinely impartial recommendations or decisions, he said, pointing out that current or former appointees at five big banks were senior officials who had previously served lengthy stints at the institutions.

“When the FCAC renames the ‘Ombudsman’ as an ‘SCO,’ it does not erase the internationally accepted operating ethical principles of a genuine ‘Ombudsman,’” Whitehouse said. “These Bank SCOs certainly does NOT rise to that standard.”


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