Industry Committee on Nov. 25th, 2024

[Shereen Benzvy Miller]

One of the obligations in the code is to meet the needs of consumers when selling them a product.

We look at how institutions are selling their products to make sure that they comply with the needs of the consumer and are not being oversold.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Savard‑Tremblay. Your time is up.

I now give the floor to Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

Five million complaints a year are filed by Canadians. Of those five million complaints, I think, by your own records, 76% are relatively simple or there is not much detail on it. However, of the ones that are settled that way, are those done with any penalty, or nothing? Are they just resolved and that's the end of it? With the other 24%, what happens with those? What notices of compliance have been levelled?

I think it's important to understand whether we have a watchdog here or not, because that's five million complaints that have been identified in the financial sector alone per year. That's a pandemic of problems there.

I go to your website. It's really hard to find basically any type of repercussions that have taken place. With five million complaints coming in, you would think that there would be something here. There's some good information about financial literacy, to be able to learn some of these things so you can get that done.

I'm looking at your website right now. It talks about how you're “protecting the rights and interests of consumers of financial products”. You have five million complaints, and on your website it's very difficult to find what's taken place with any of these types of issues that have been raised. You deal with very serious issues—everything from gender issues to seniors and others.

Why is it so difficult to find out whether you've done a good job or not on the five million complaints and what the repercussions of that issue are? That's significant. It's five million Canadians per year.

[Jason Bouzanis]

Perhaps I can start.

If I were to use last year as an example, in fiscal year 2023-24, FCAC's consumer information centre received just over 9,000 inquiries and complaints. Of those 9,000, approximately 6,800 were related to complaints that individuals might have against a financial institution, and 283 of those related to areas that FCAC actually oversees.

That's not to say that we don't provide support to the Canadians who call us for areas outside of our mandate. Of course, one of our roles is to provide Canadians with information to help them navigate the complaint-handling process and explain that they do have the option to escalate their complaint to an external complaint body. Our role is to ensure that those 9,000 or so Canadians who are calling us are provided with information that helps them navigate the financial marketplace.

My colleague, Mr. Lofranco, could speak to what we do with the reportable complaints.

That being said, all of the information that we receive from complainants who contact our consumer information centre not only helps us monitor trends and issues in the financial marketplace, but also helps inform our supervisory activities.

[Brian Masse, NDP, Windsor West, ON]

I appreciate that.

What I'm trying to find out is why your web page is not identifying the complaints and where they're coming from in terms of advocacy for consumers. I'm just going by a CBC report at the moment that relates to the investigation that you did with regard to BMO, RBC, CIBC, Scotiabank and TD. It references the number of complaints. Even if the complaints are down, if I go to your website and if I am a consumer looking for rights on this, I don't see anything here that identifies how you protected a consumer, what the repercussions were and what they did.

If I were going to advocate for myself and my family on this, if I had been harmed in any way by my banking institution, I'd like to know what reparations I should expect to get as a consumer for something that took place. There should be some way that you can measure it. It almost seems like the real estate industry, in the sense that you have to try to figure out the price of a house by your own volition, as opposed to.... I don't see what a consumer should expect.

Why are there no percentages here or expectations delivered in terms of repercussions that took place on some financial predators that have been out there? The volume of complaints is significant, but your website just reflects your advocacy. It doesn't reflect the results for consumers.

[Shereen Benzvy Miller]

Do you want to speak to that?

[Jason Bouzanis]

Sure.

A variety of different aspects were posed in that question. In terms of how we develop our consumer information, it's actually developed in such a way that a consumer could be looking for information on a specific product or service. Let's say it's on credit cards. I'm a consumer and I go to access information on credit cards. We embed the information on what a consumer's rights are, related to their financial institution with a credit card, in the section that details the credit card information.

The reason we do this is that we have found through our research—this is a key component of our national financial literacy strategy—that Canadians benefit most from just-in-time financial knowledge. When they're looking for information on credit cards, we want to provide them with the information at that time on their rights dealing with a credit card.

That's just one example on the consumer information side. We can speak about it from both sides of our mandate, though—from the supervision side, in terms of what we do to make sure Canadians are protected, but also from a research perspective, or from the perspective of the national financial literacy strategy. I'm happy to expand on that.

In terms of how we communicate with Canadians on what their rights are, it's perhaps helpful to understand how we choose to communicate with them most effectively.

[The Chair, Liberal, Joël Lightbound]

Thank you.

The time is up, but if you want to add something briefly, I can give you a few seconds.

[Shereen Benzvy Miller]

I have only one thing to add. Just for clarity, we do have data. In 2023-24, the agency received 260,000 reportable complaints from regulated entities. They're broken down by the top five products or services that the banks reported—accounts, credit card, debit card, mortgage and investment. We have the percentages of those totals by subject area.

I don't know if that adds any clarity on what you're looking for.

[Brian Masse, NDP, Windsor West, ON]

It does help. I guess what's difficult here, though, is that if you're a consumer advocating for yourself and you go to the website, you can't find what you should expect to get as a reparation for being abused. The problem I have as an MP is sending people to a website that talks about all the glory of how they're protected, but it doesn't give them any expectations on what it will be like if there is harm inflicted.

At any rate, there's a lot of good information here. At the same time, you're advocating for Canadians, but there's nothing here that deals with how they can actually get a deliverable for their experiences.

[Shereen Benzvy Miller]

I take your point. Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Masse.

Mr. Généreux, you have the floor.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chair.

Thank you to the witnesses.

Ms. Miller, if I understand correctly, your agency receives $5 million a year from the federal government, and the rest of your funding comes from the banks.

Is that correct?

[Shereen Benzvy Miller]

That's correct. The $5 million is just for our activities to promote financial literacy. The way the funds are used is very detailed.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Okay.

In the House of Commons, a question of privilege is currently being raised in relation to Sustainable Development Technology Canada, or SDTC. People on the SDTC board of directors paid their own companies with public funds.

I will make a connection to what I'm seeing in your agency. The type of funding you have may involve a conflict of interest. You are mostly funded by the banks, but you could end up reprimanding them, so to speak, for their actual or potential failures in delivering their services to their clients and the general public.

Do you not see a conflict of interest in the fact that your funding comes from the banks?

[Shereen Benzvy Miller]

I don't have an opinion on that. Our way of doing things is really standard across all Canadian regulators. The form used by the agency is the same as the one used by other organizations.

Also, if you have any questions about that, I would suggest that the Department of Finance would be in the best position to answer them.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I find it somewhat surprising that an agency that is supposed to supervise the banks' actions is funded by the banks themselves. I'll leave it at that for now.

On November 4, Marie‑Ève Fournier published an article in La Presse revealing that CIBC was charging very high fees for cash advances made in certain courthouses. The news has also been reported in other media.

In a conversation between the bank and the customer interviewed by the journalist, which the customer recorded, she was told that the Government of Quebec, through the Department of Justice, was forcing the bank to charge high transaction fees.

Do you also have to supervise that kind of behaviour? Do you get any complaints about that? Have you ever been made aware of this type of behaviour?

[Frank Lofranco]

Thank you for your question.

Specific to this situation, we have become aware of the issue. Although there is a jurisdictional consideration, there is a federal financial institution in question, as well as a payment card network operator, so we are currently looking at the situation to understand the facts with a view to ensuring compliance on the basis of the obligations that are currently in place.

I cannot say more at this time about our supervisory actions, but I want to reassure you, in response to your question, that we do engage when we see these kinds of issues and complaints.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

This case, like many others, is probably in the public domain. Do you keep an eye on what appears in the media in general and the actions of the banks? I assume you have people working on that.

If not, do you conduct a more thorough investigation when you receive complaints about the way banks behave towards their customers?

[Frank Lofranco]

The short answer to your question is yes. Even though we see an issue with respect to a specific institution, once we've assessed the issue and understand the risks that may exist systemically, we take opportunities to engage other institutions that may find themselves in similar situations and may be behaving in similar ways.

Systemic risk is a risk that we consider, and we have instruments at our disposal to make those inquiries and those determinations of non-compliance.

[Shereen Benzvy Miller]

We also do media scans so that we are aware of issues as soon as they hit the media. This is not just through the complaints system from consumers or from banks, but from media reports as well.

When we find that there is a potential systemic problem, the commissioner will put out a bulletin. We have bulletins that are proactive measures to inform the industry about expectations related to compliance with market conduct.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Chair, I would like you to ask our colleague Mrs. Romanado if she took a photo earlier in the meeting. It seemed to me that she was looking at us and, given the angle of her phone, was taking a photo.

I just want to make sure that no photos are taken during our meetings.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Généreux.

I did not see that, and Mrs. Romanado assures us that she didn't.

While I can understand the temptation to take a photo of you, Mr. Généreux, she restrained herself from doing so here at the committee.

As it turns out, Mrs. Romanado, you now have the floor.

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

Thank you, Mr. Chair.

I can assure my colleague opposite that I know the rules very well and would never take a photo in a committee.

With that, I'd like to thank you, Mr. Chair, for the opportunity to welcome the witnesses.

I just want to make sure I'm understanding something. I'm listening to this conversation and I'm looking at your website. Your role is to protect, supervise and educate. I understand that your operating budget last year was $53 million, of which 90% was funded through the banks. You oversee the banks and complaints from the banks. I understand from a colleague that 27,000 complaints were received, but no one ever responded to them.

I want to make sure...because you can understand the optics of this. We're hearing that you supervise the banks or their compliance with the code, and they're funding you. You can see that there could obviously be a perceived conflict of interest. Can you just make sure you're clarifying for everyone? Am I understanding this correctly?

[Shereen Benzvy Miller]

No, you're not. You're probably understanding correctly what has been said by your colleagues, though I would like to add clarity to the complaints, for example. We are not a complaint body. We are an oversight agent. We are a regulator. We are responsible for ensuring that there is an alignment between market behaviour, the way in which consumers are treated.... I am not the Superintendent of Financial Institutions. I am responsible for financial literacy and consumer protection in the financial space.

It's part of the prudential measures that are in place in the ecosystem so that we engender trust in the system. It's making sure that customers are treated properly and fairly, and in a way that is compliant with legislative expectations and conduct expectations that are established in these various codes, whether it's for payment card networks or whether it's for financial institutions.

Our role is to ensure that when there are complaints, they are answered by the appropriate bodies, so generally by the institutions against which the complaints have been leveraged. If that's not satisfying for the consumer—because you may not be happy at the first level of complaining; you may not like the response or you may feel it's insufficient—there is actually an ombudsperson who is responsible for dealing with the complaints at another level, and it's an independent ombudsperson, as most ombudspeople are.

We did not receive 27,000 complaints. That's a media description, and yes, there was an article that said that, but it shows a lack of understanding of the role of FCAC. The role of this organization is to protect consumers, to ensure alignment with market conduct and to ensure that the actors are behaving appropriately, so that when these institutions receive complaints, they are responding appropriately to the complainants and seeing that the complainants are made whole. We can then supervise and protect related to that.