A federal regulator reports a 28% increase in complaints against banks and other financial institutions, though fines for lawbreakers remain few and far between.
The Financial Consumer Agency received 5,634 complaints from the public last year compared to 4,410 the year before, according to accounts tabled in Parliament. Of 937 complaints deemed serious enough to raise questions of illegality, five resulted in actual fines – a conviction rate of 0.5 percent.
The agency refused to divulge the name of banks cited for breaches of consumer laws, citing privacy. “For reasons of confidentiality, the agency cannot provide additional or more specific details,” a spokeswoman said.
Most of the agency’s $13.26 million annual budget is paid by banks and financial institutions. Ursula Menke, the $266,000-a year commissioner of the agency, did not comment. Menke earlier told the Senate finance committee that “education” remained a key to sound consumer practices.
“There will always be a need to continue to educate,” Menke said.
The agency reported it typically takes 18 months to over two years to complete investigations of serious allegations involving breaches of federal law, regulations or codes of conduct.
“This raises many questions,” said MP Glenn Thibeault, New Democrat consumer affairs critic. “Who are they charging? Are the fines enough to deter institutions from doing it again?”
“When you start policing yourself and your investigations are confidential, how is the public supposed to know?” said Thibeault, MP for Sudbury, Ont.
The agency cited three specific fines:
- An unnamed bank fined $50,000 for failing to disclose payment schedules to a customer whose mortgage fell into arrears due to bank error, in breach of the Bank Act and Cost of Borrowing Regulations;
- Another unidentified bank that billed a customer $401 taken by thieves from a debit card reported as stolen; the bank relented after being cited under the Canadian Code of Practice for Consumer Debit Card Services that assures clients are not liable for losses “beyond their control”;
- A third unnamed institution fined $50,000 for failing to advise customers of the terms of mortgage penalties as required by Cost of Borrowing Regulations.
The agency’s budget is funded 85 percent by banks, trusts and insurance companies, with a supplement of $2 million a year voted by Parliament.