Finance Committee on May 28th, 2018

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I have one other question.

There is also the concern raised about in-branch versus a call centre. With call centres, it seems—and I would imagine that it's because the capacity is there—that everything that is said is recorded. If people know that they're being recorded and their only primary language is, obviously, what they say to someone—auditory—they're going to be very careful about what they say and how they present a product. Obviously, they have a script in front of them that they're able to follow to a T. I think most Canadians would be quite alarmed to find that a similar kind of scrutiny is not available for within branch.

Again, I would say that it would be helpful for the FCAC.... If you are able to articulate that there is a difference and that there is a problem, why would you not recommend some sort of solution that we could look at? I know you said many times today, Ms. Tedesco, that you can only work within the laws that you have, and, again, I appreciate that. However, going back to Mr. Easter's comments about your being the head, many of us at this table and many Canadians would hope that the FCAC would be the vehicle for voicing concerns and making suggestions on how things could be made better. It may not be within your capacity, but certainly if there is a problem, I think people would expect you, as the first person, to voice it.

[The Chair, Liberal, Wayne Easter]

Mr. McLeod.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair.

Thank you to the presenters here today.

I'm a little bit worried. There was quite a large number of complaints made on the practices of the banks, or at least to me it seems to be a large number, 4,500. It doesn't seem that we've been able to be all on the same page when it comes to looking at what was being raised as a concern.

With regard to the 4,500 complaints, were they all in the same area? Is that part of the issue? Are there different categories that these complaints fell in and, if there are, could you maybe bundle them up for me so that I can understand it?

[Lucie Tedesco]

Richard, please speak and complete my answer.

My understanding is that those 4,500 complaints were all around express consent and about the alleged product being purchased without consumers' consent.

[Richard Bilodeau]

I would just add that in addition to that aspect of it, it may also be a consumer who, when they complained to their bank or to the FCAC, said they didn't understand what they were buying.

[Michael McLeod, Liberal, Northwest Territories, NT]

Okay.

We had 4,500 complaints. You did an investigation, and following the investigation there were a lot of things being said about people not being happy. The Canadian Foundation for Advancement of Investor Rights is saying that the review was too general, and that the recommendations were so vague. I'm just wondering if your mandate allowed you to look at the real core of what is being expressed here out of the 4,500. Were you able to look at what they're raising as a concern, or did your investigative mandate not allow you to go far enough? I'm just not clear on that.

[Richard Bilodeau]

It's a good question.

Just to start quickly with the source of the complaints, those are complaints the banks are required to report to us. They're also complaints that we had internally at the FCAC. We get numbers from the banks. We asked the banks to give us every single file they had in relation to these complaints so that we could look through them, and we looked through all of them. By the way, that included listening to actual phone calls the consumers had with the banks to understand what was happening.

Those complaints fell within an area that we oversee. They were things that we are able to address, if the evidence supports it, obviously, through the various mechanisms that we have. These include administrative tools or even, if the investigation leads this way, notice of the violations and, eventually, decisions that the commissioner will have to render. We were able, and we are able. That work is continuing with those complaints.

[Michael McLeod, Liberal, Northwest Territories, NT]

How many of these 4,500 complainants did you talk to?

[Richard Bilodeau]

I could not tell you a number today.

[Michael McLeod, Liberal, Northwest Territories, NT]

Are you talking to them? Have you talked to a large percentage of them?

[Richard Bilodeau]

Typically, the way we do our work is to look at it in general. We don't sanction individual issues with complaints. We look at areas where there are more than just a few people impacted. We try to understand what the issue is, what the root cause of that breach is, and address that root cause through the tools that we have. If it requires us to speak to a consumer, we'll do that. For example, we have recorded calls—one of the members referenced that earlier—and oftentimes, you actually have a conversation that you can listen to.

[Michael McLeod, Liberal, Northwest Territories, NT]

Why are we still hearing that the investigation just didn't meet the complaints that were being voiced? We have bank employees who are saying that the pressure is still on, that nothing has changed, and that they're disappointed in the review. Why are we hearing that? If the banks are being investigated, you would think things would have changed.

[Richard Bilodeau]

I think we need to separate the two issues. The review was really aimed, as the commissioner explained earlier, at identifying the risk drivers, and that could lead to a bad consumer outcome. In the context of that, the report is very clear. We found that it's the sales culture within the banks that's very sharp for certain areas, like mobile mortgage specialists cross-selling creditor insurance to third parties. That is definitely the culture there. Some employees told us so.

[Michael McLeod, Liberal, Northwest Territories, NT]

So the comment that banks are not there to look after customers' interests is what you're saying.

[Richard Bilodeau]

I think what we said in the report recommendation is that they need to pay more attention to that.

[Michael McLeod, Liberal, Northwest Territories, NT]

You also said that the report didn't address alleged breaches of market conduct obligations. What does that mean? What kind of breaches are those?

[Richard Bilodeau]

For example, if we identified breaches through our review of the 4,500 complaints, those are not addressed in this report. Those are on that separate track for investigative purposes. When my team's done with that work, we'll make recommendations to our deputy commissioner, and eventually, to the commissioner.

[Michael McLeod, Liberal, Northwest Territories, NT]

That's being done by your organization, right?

[Richard Bilodeau]

That's being done by us, yes.

[Michael McLeod, Liberal, Northwest Territories, NT]

So we may see further resolve.

[Richard Bilodeau]

Absolutely. Eventually decisions, if there are decisions, are published on our website.

[Michael McLeod, Liberal, Northwest Territories, NT]

When can we expect those?

[Richard Bilodeau]

I wouldn't want to give you a timeline because it is an investigative process. There are statutory deadlines in the act that say we have to issue violations within two years of a matter being known to us, but there are appeals within the act, so I wouldn't want to promise you a timeline on that and not be able to hold to it. What I can tell you, however, is that it is a priority for my team to investigate the issue. It's very important that we understand the issue. We want to make sure that we've collected all the evidence. We want to make sure that, when we come up with our decision, it is robust and is based on the evidence available to us.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you.

[The Chair, Liberal, Wayne Easter]

Ms. Tedesco.