In 2020, Canada’s financial consumer watchdog documented something that every bank customer who has ever tried to escalate a complaint already knew. The Financial Consumer Agency of Canada (FCAC) found that the escalation process puts the onus on consumers to navigate a system that is slow and cumbersome — and that a significant proportion give up before it is over.
FCAC estimated that more than 90% of consumers whose complaint was not resolved at the first point of contact did not escalate it. They abandoned it.
That finding led to the introduction of the 2022 Financial Consumer Protection Framework. These reforms cut the time a bank is given to try to resolve a complaint internally, from 90 days to 56.
Banks were required to tell consumers about their right to go to the Ombudsman for Banking Services and Investments (OBSI) if unsatisfied with the proposed resolution. The banks were also prohibited from using the word ombudsman to describe their internal complaint office. The label implied independence the function did not have. Regulators said so plainly.
The label went. The office stayed.
A new sign
Every major Canadian bank retired the ombudsman label and replaced it with a rechristened internal appeals office. A Client Complaints Appeal Office here. A Senior Customer Complaints Office there. Each one staffed by bank employees, funded by the bank, and — by the bank’s own written admission — explicitly not an independent dispute resolution service.
Scotiabank’s banking complaint process now runs through three internal layers before a consumer reaches OBSI — all of them inside the bank, all of them bank-controlled.
These offices are intended to deal with banking complaints. Investment complaints from bank-owned dealers are governed separately under Canadian Investment Regulatory Organization rules — though there is evidence to suggest that staff at bank-owned dealers occasionally funnel investment complainants through the banking process, a misdirection that does the consumer no favours.
In fairness, the 2022 reforms did shorten the path to OBSI. Once that 56-day window closes — or the bank issues a final response — the consumer can go directly to OBSI, skipping the appeals office entirely.
When providing a complainant with its final response, a bank must tell the consumer about the right to go to OBSI. It is not required to disclose that the appeals office is a choice, not a requirement. Most consumers do not know the difference. The procedures read as a sequence. Most follow them that way.
The unanswered question
An independent review of OBSI’s banking and investment mandates is currently underway. The final report is expected later this year. Its stated purpose is to assess whether OBSI fulfils its obligations and operates according to best practices. That is the right question about OBSI.
The related question — and one FCAC should ask — is whether the 2022 reforms materially changed the experience of a consumer who files a complaint and meets resistance. If the rebranded internal architecture is still producing significant abandonment before consumers reach OBSI, an independent review that finds OBSI operating well will only highlight the unfairness of an intake system that keeps many complaints from getting there at all.
Some internal filtering serves a legitimate purpose. Not every unresolved complaint belongs in front of a national ombudsman. But a filtering process that serves consumers looks different from one that outlasts them. The 2020 data showed what the old system produced. The new system has now operated long enough to be measured against the same standard.
The data required is not exotic. How many complaints reach OBSI as a proportion of those filed with banks? How does that compare to similar systems? How many consumers abandon a complaint at each internal stage, and why?
Since 2022, FCAC has collected and published significantly more complaint data than before. In the first year of the reforms, total reported complaints increased roughly 15-fold. But volume is not outcome. FCAC has published no abandonment data since 2020. The data sits in the portal. What remains missing is any serious examination of whether the reforms changed anything that matters.
The same office
Regulators were right to ban banks from using the ombudsman label. The 2022 reforms tightened the timeline, required disclosure and gave consumers a more expedited path to OBSI. Those are real improvements.
But the central finding of the 2020 review was not semantic confusion. It was that the banks’ complaint-handling architecture wore consumers down before they reached external redress — and did so to damaging effect.
The banks retired the word. The architecture remained. The unresolved question is whether the renamed structure continues to produce the same abandonment problem that prompted the 2020 review. FCAC has the data to answer that question. It should.