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Federal financial consumer protection framework – A closer look at complaints

Note:  This is the third in a series of monthly articles intended to parse the new federal financial consumer protection framework (the “Framework”).  To view other articles in the series scroll down to the bottom of this article.

The January edition of our commentary on the new framework outlined some of the changes likely to impact bank governance. The focus of this installment is to examine Division 1 of Part XII.2 of the legislation, which provides interpretative assistance, through its definitions, in applying the provisions of other Divisions.

Of note, is the fact that the definitions, currently scattered across the Bank Act (“the Act”) and the regulations, have been consolidated under one section (Division 1) of the Act, making it more efficient and reducing the potential for inconsistency. Some definitions make their appearance for the first time, while others have undergone an expansion in scope. The definition of “complaint” falls into the latter category. 


Today, a “complaint” is defined as a “complaint that is made by a person

  • (a) to a bank or an authorized foreign bank about a product or service that was requested or received by the person from the bank or authorized foreign bank; or
  • (b) to an external complaints body about a product or service that was requested or received by the person from a member of that body. (réclamation)”

Compare the new definition which reads: “complaint means dissatisfaction, whether justified or not, expressed to an institution with respect to

  • (a) a product or service in Canada that is offered, sold or provided by the institution; or
  • (b) the manner in which a product or service in Canada is offered, sold or provided by the institution. (plainte)

The expanded definition now includes an element of “dissatisfaction” and is related to a product or service that is offered, sold or provided, rather than one that is requested or received, thereby shifting the focus away from the consumer and more toward the bank.

In addition, any “dissatisfaction” related to a bank product or service falling within the new definition, will be deemed a complaint, regardless of whether it is justified or not. This change is expected to considerably increase the number of complaints banks will have to track and report to the Financial Consumer Agency of Canada (“FCAC”). 

The definition also introduces the notion of the “manner” in which banks sell their products and services. This element was likely added in an effort to capture potential incidences of mis-selling and of other questionable sales practices, to respond to FCAC’s report on bank sales practices. [1]

It would also appear that, while the new definition makes no mention of a complainant’s legal status, as is the case with the current definition, when read in conjunction with the Complaints Process provisions (Section 627.43 and subs.), it is clear that the status quo is maintained (“person”), which means that entities will continue to be caught by the definition.

Undue Pressure

“Undue pressure” which is currently used in the context of tied selling, is now defined by the new Framework. It refers to:

“any pressure, imposed in the form of a practice or communication or otherwise, that could be reasonably considered to be excessive or persistent in the circumstance. (pressions indues)”

The reference to “excessive and persistent practice or communication” raises questions with respect to the phrase’s intended meaning and application. Banks would benefit from guidance from the FCAC to help with its interpretation. 

Along with the additional tracking and reporting of complaints banks will have to undertake and the additional FCAC guidance they will be required to clarify some of the new and reworked definitions, banks will also have put considerable effort in ensuring that the changes described above are adequately captured in their policies, procedures and processes.

In our next installment on the Framework, we will turn our attention to the requirements of responsible business conduct under Division 2 (Fair and Equitable Dealings) of the Act. Read our previous installment here.

[1]Domestic Bank Retail Sales Practices Review -

Federal Financial Consumer Protection Framework Article Series and Related Insights