The Financial Consumer Agency of Canada (FCAC) has found a lack of consumer protection around unfair treatment, its report on best practices in financial consumer protection says.
While FCAC found Canada’s overall federal financial consumer protection framework to be strong, it noted areas that could be strengthened, including addressing consumer protection in legislation, better supporting the supervisory and enforcement work of the agency with additional tools, and introducing targeted measures to better empower and protect consumers.
For example, the report notes that, according to the G20 High-Level Principles, financial consumers should be treated equitably, honestly and fairly at all stages of their relationship with financial service providers. Yet, no provincial consumer protection laws mandate that consumers be treated “fairly,” in particular, says the report.
However, it also notes that the Autorité des marchés financiers is currently considering including fair treatment as an integral part of governance for provincially regulated financial service institutions offering credit.
Also, The Bank Act prohibits specific practices such as coercive tied selling or charging for products or services without express consumer consent. However, “there are currently no provisions requiring fair treatment of consumers or prohibiting unfair treatment,” says the report.
In March, FCAC released findings from a review of business practices across Canada’s big banks, following media reports last year of questionable sales tactics. That report said the banks had insufficient controls in place to mitigate risks of mis-selling.
The report on best practices comes in response to a request from the Minister of Finance that FCAC engage with provincial and territorial regulators and other key stakeholders to identify best practices in financial consumer protection in place across the country. Findings from the report will help inform the government’s work on a new financial consumer protection framework.
The scope of FCAC’s review focused on consumer protection measures that apply to financial products and services, such as credit products and deposit products. In parallel, FCAC assessed international best practices and the current federal framework.
For full details, including a list of best practices for consumer protection, read the FCAC report.