THE STANDING SENATE COMMITTEE ON BANKING, COMMERCE AND THE ECONOMY
EVIDENCE
OTTAWA, Wednesday, February 4, 2026
The Standing Senate Committee on Banking, Commerce and the Economy met with videoconference this day at 4:19 p.m. [ET] to the study the subject matter of those elements contained in Divisions 4, 9, 10, 11, 12, 13, 14, 15, 16, 17, 22, 23, 37, 39, 43 and 45 of Part 5 of Bill C-15, An Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025.
Senator Toni Varone (Deputy Chair) in the chair.
[English]
The Deputy Chair: Honourable senators, my name is Toni Varone, senator from Ontario and deputy chair of the Standing Senate Committee on Banking, Commerce and the Economy. Our esteemed chair, Senator Clément Gignac, is unable to be with us today.
I welcome members of the committee and our witnesses, both in person and virtually. I also wish to welcome everyone who is watching online.
Before we begin, I would like to ask all senators and in-person witnesses to consult the cards on the table for guidelines to help avoid audio feedback issues.
Please keep your earpiece away from all microphones at all times. Please refrain from touching the microphone. Activation and deactivation are handled by the console operator.
Finally, please avoid handling your earpiece while your microphone is on. Earpieces should either remain on the ear or be placed on the designated sticker at each seat.
Thank you all for your cooperation.
Before proceeding further, I would like to ask my fellow committee members to introduce themselves.
Senator Fridhandler: Senator Daryl Fridhandler, from Alberta.
Senator Loffreda: Welcome. Senator Tony Loffreda, from Montreal, Quebec. Welcome.
[Translation]
Senator Ringuette: Hello. Pierrette Ringuette from New Brunswick.
[English]
Senator Yussuff: Hassan Yussuff, Ontario.
Senator McBean: Marnie McBean, Ontario.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
The Deputy Chair: Thank you, senators.
Today, we conclude our pre-study of Bill C-15. As you know, we received an order of reference on November 26, 2025, authorizing this committee to examine and report on the subject matter of these elements contained in Divisions 4, 9-17, 22, 23, 37, 43 and 45 of Part 5 of Bill C-15, An Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025.
This is our seventh and final meeting before we report our observations to the Senate Chamber at the end of next week.
Today’s meeting will be divided into two, 60-minute panels. I would like to welcome our first witness, representing the Ombudsman for Banking Services and Investments, Sarah Bradley, welcome.
Ms. Bradley, I understand that you may have brief opening remarks. Following your remarks, senators will ask their questions. The floor is yours.
Sarah Bradley, Ombudsman and Chief Executive Officer, Ombudsman for Banking Services and Investments: Thank you very much. Good afternoon, chair, honourable members of the committee. Thanks for the invitation to be here with you today.
I’m Sarah Bradley, the Ombudsman and CEO of the Ombudsman for Banking Services and Investments. We are known, in short, as OBSI. I’m also currently serving as chair of the International Network of Financial Services Ombudsman, which gives me some perspective on the approaches being taken globally to the issues facing financial ombudsmen worldwide.
The Ombudsman for Banking Services and Investments is a national, independent and not-for-profit dispute resolution service for consumers and financial services firms.
As part of the consumer protection framework in Canada, we’re mandated by both federal and provincial governments and regulators. We provide our services to all bank consumers and retail investors in Canada, as well as most credit union members.
More than 1,500 financial services firms from across the country participate in our service. This year marks OBSI’s thirtieth anniversary. For three decades, we have been helping to ensure fairness in Canada’s financial marketplace.
At OBSI, we help Canadian financial services consumers with their questions and concerns. We conduct fair, independent investigations of complaints that consumers have not been able to resolve directly with their financial services firm.
We are quite busy. Last year, we responded to more than 26,000 inquiries from Canadians. We opened over 6,000 investigations of consumer complaints; that’s over 500 inquiries and 115 investigations every single week. This gives us a unique perspective on the kinds of challenges that Canadian consumers are facing in an increasingly complex and rapidly modernizing financial system.
We also consider it an important part of our mandate to share the insights of our work to help ensure a fair, effective and trusted financial services sector.
We’re not a consumer advocate, but we publish data and statistics, as well as case studies and special reports, to help consumers, financial services businesses and regulators understand the issues and challenges being raised by consumers.
Among the complaints we deal with, one issue stands above all others today, and that is fraud. In recent years, we have experienced an unprecedented rise in fraud-related complaints driven largely by digital and impersonation-based scams.
In our banking mandate, approximately one third of the cases we deal with involve fraud. Last year, that was over 1,800 investigations. The scale and human impact of these cases can’t be overstated.
However, in most cases, we are not able to provide any recourse. One in five fraud cases at OBSI last year resulted in a settlement or recommendation for compensation.
Four out of five fraud victims who come to us for assistance are left with their losses. In most cases, the reason that we’re not able to recommend compensation is because we have no legal or regulatory basis to do so.
Sharing confidential banking information, intentionally or unintentionally, is a breach of the agreement that consumers make when opening a bank account, which leaves them liable for their losses in most fraud cases. Banks have very limited obligations to protect their customers from these crimes.
When banks do provide restitution, they often do it as a goodwill gesture to their customers.
When we do recommend compensation in fraud cases, it is usually because our investigation has shown that the bank didn’t meet the obligations that it does have under the debit card code or the senior’s code, or has not lived up to its own public representations about fraud detection and prevention or has failed to prevent specific fraud when it had a clear opportunity to do so.
In our experience, consumers often incorrectly believe that they are going to be protected from fraud and that their bank will return any money that they have lost to fraud. They believe that they haven’t done anything wrong. In fact, that’s usually what our investigation also shows.
This consumer expectation is likely based on the general understanding and advertising of zero liability protections specific to credit card products, banks’ public representations about their security and protections and the general reputation of Canada’s banks as safe, secure places for the safekeeping of consumer deposits.
Consumers are often devastated to learn that they have been mistaken about the protections that they thought were in place.
With that, I’ll look forward to your questions.
The Deputy Chair: Thank you, Ms. Bradley.
We will allocate five minutes for both questions and answers.
Senator Marshall: Thank you for being here.
I was looking at some of the statistics you were mentioning, for example, the increase in fraud-related cases. There is a breakdown provided to us, and I think they got it from information from your organization.
Who is responsible for devising programs to make people aware of instances of fraud? For example, based on the information we have, it says e-transfers, 822 cases; it must be possible to break them down as to the reasons for the fraud. Does your organization have a role in that, or do you leave it up to the financial institutions? Then, who is responsible for making consumers aware of how they can protect themselves?
Ms. Bradley: Thank you for that question, Senator Marshall.
I think this is a shared responsibility. There is a lot of good work being undertaken today to help sensitize consumers to risks and best practices.
We certainly take an active role in sharing information about the cases that we see. We publish case studies. I’ll take media inquiries and interviews when available. There are natural limitations from a budgetary perspective. We take a very active role.
I know that the Financial Consumer Agency of Canada that I believe you are speaking to later today has a very active program.
I believe most banks are involved through the Canadian Bankers Association, and individually are involved in trying to make consumers aware of the risks that are out there and do the best they can to educate the public.
Senator Marshall: Do the financial institutions each have their own program or say, for example, the e-transfers; do they get together, devise one program and decide how they are going to inform their consumers or their customers, or is every financial institution on its own?
We get simple messages like don’t share your PIN, but some of the more elaborate things we don’t get much direction on. Is that something that everybody is on their own, or is there something that brings everybody together?
Ms. Bradley: I’m not that familiar with the specific work that the banks and the Canadian Bankers Association are doing. I am aware that they are very actively engaged on the fraud issue and participating in a new anti-fraud coalition that I believe has public education as a cornerstone of its mandate.
Senator Marshall: Thank you.
Senator Fridhandler: You mentioned that consumers misunderstand the relationship with their financial institutions and expect that there might be some coverage, or they expect more when they have been defrauded in that instance.
Notwithstanding those agreements, there are many times governments legislate. Would it not be a possibility to shift the risk to financial institutions from consumers? They are more able to cover and address the risk of fraud than consumers, even though the consumer might be at fault.
I’m suggesting that there might be the ability to regulate (a); and, (b), what do you know about what your peers might do internationally relative to shifting responsibility on fraud?
Ms. Bradley: Thanks for that question.
We, in Canada, in fact, have some good examples of limited liability regimes within the banking system itself. It has for many years been the system for credit cards that consumer liability is limited to $50 unless there is evidence of gross negligence and gross fault. There are examples like that.
The new Consumer-Driven Banking Act, for example, also includes a limited liability regime for consumers. That initiative, in particular, is especially well founded because it makes it clear to all participants in the system, right now, from the outset of the system, that consumer liability is going to be limited.
The systems, processes and products that are currently presumably under development will be designed with that limited liability in mind. I think that’s very wise and forward-looking.
You asked about what is happening internationally. There is a broad range of approaches being taken internationally. My understanding from my work with INFO Network is that different countries are taking different approaches. This is a global problem. There is no silver-bullet solution that I am aware of. It is a problem that is being tackled by governments worldwide.
Senator Fridhandler: I will stick to the fraud. On page 26 of your last annual report, there is a graph on banking issues. There is a real kind of trajectory sometime between early 2021 and 2022. What happened to trigger that? Was that COVID?
Ms. Bradley: The rise in banking complaint volume overall?
Senator Fridhandler: Yes. What happened then?
Ms. Bradley: We did see a rise in complaint volume associated with COVID, although I think probably a bigger influence was the passage of Bill C-86 in 2022. The passage of the bill, I think, happened in 2020, but it came into force in mid-2022. That was the introduction of the Consumer Protection Framework in the Bank Act that had many significant and positive impacts on consumer protection within the banking framework in Canada.
One of those impacts was to impose more rigour and requirements on banks in the way they handle complaints internally, giving consumers better visibility to their ability to escalate complaints both internally and externally.
We saw more complaints being escalated within the banks and more complaints being escalated to us as an external ombud service.
Senator Fridhandler: It was a recording issue, not necessarily an event issue, that triggered the greater number year over year?
Ms. Bradley: I think it was more of a case that there was less attrition. There was a better recording of complaints, and there was less attrition of complaints and, yes, more complaints being ultimately escalated until they were resolved.
Senator Loffreda: Thank you for being here.
You mentioned that you are concerned. I was reading that four in five Canadians report being targeted by attempted fraud in the past two years.
I also read that in 2024 Canadians lost over $643 million to fraud. You mentioned that four out of five Canadians are left with their losses.
Division 16 of Part 5 of Bill C-15, which is under review by us, introduces a section in the Bank Act that requires banks to establish policies and procedures for detecting and preventing consumer-targeted fraud and mitigating its impacts.
Now, given that financial services are becoming more digital and interconnected, do you feel that consumers will be adequately protected under the amendments in Bill C-15?
Does OBSI have the authority and tools needed to resolve those complaints effectively?
How can we solve the issue if four out of five Canadians remain with their losses?
Ms. Bradley: Thanks for the question.
The Bill C-15 protections represent very important steps forward in terms of protections available to Canadians.
The ability to turn on and off features, for example, features that will be prescribed, but I would imagine might include features like global money transfer, are very important in terms of empowering Canadian consumers to reduce the level of risk that they themselves have.
Many Canadians are not aware that their online banking platform right now, today, offers the ability to transfer up to $50,000 a day internationally. And for some Canadians, undoubtedly, it is an important feature that they use. For some, though, it will never be used and represents a real risk should somebody gain their banking credentials, fraudulently or through malware. Being able to turn on and off those features, I think, is an important measure.
The protections from imposing the requirement on banks to have these policies and procedures in place are also very important.
As far as I’m aware, all banks do have policies and procedures in place for detecting and preventing fraud, but I can tell you that they are different among the different institutions.
Different banks have different levels and different approaches to the problem. They have different approaches to compensating consumers or offering goodwill compensation.
It is an unlevel playing field. I think these regulations are an important step.
In watching the earlier testimony at this committee, I have heard the Department of Finance representatives make reference to the fact that this is a first step and that there is a continuous process of evaluation of potential future measures that are ongoing. I think that those protections are important for Canadians and do represent a good first step toward offering protections.
You asked about OBSI’s authority. Right now, our authority is that we work with consumers and financial institutions to reach fair outcomes in cases. It is a soft authority but one that is effective in the sense that we, so far in 30 years, have never had a bank refusal of one of our recommendations.
So when we recommend compensation to consumers, there is generally compliance. But what we are able to fairly make recommendations for is to hold banks to the obligations that they have and to the standards that are in place for them. We have to be fair to consumers and to banks.
Senator Loffreda: Thank you for that.
[Translation]
Senator Henkel: In your activity report, you also say that you are handling more complaints more quickly while maintaining the quality of the process. However, since banks are not obliged to follow your recommendations, will the speed of the process make any difference to fraud victims?
[English]
Ms. Bradley: Thank you for your question. As you will have noted from our reports, which you are familiar with, our complaint volume has risen significantly in recent years. It has posed both a challenge and an opportunity for our organization. It is a challenge, of course, to grow and scale and be responding effectively to Canadians at much higher volumes than we were previously required to do, but the opportunity has been to recognize our opportunities for efficiency and economies of scale and scope, and we have been able to do that.
The opportunity we also have is to ensure that our investigations of cases are proportionate to the issue in the case and that we are able to get to fair outcomes as quickly as possible in each case.
We have also been able to provide our teams with better tools and better guidance that allows us to deal with high volumes of, in many cases, similar types of complaints. That is where we have been able to realize the greatest efficiency.
As I mentioned earlier, we have a very good track record, a 100% track record, of compliance of Canada’s banks with our recommendations. I think they are very open to resolving complaints with their consumers fairly. It is just that often, in cases where we are recommending compensation, we have reached a different conclusion, but upon explaining our reasoning to the banks, they generally agree to compensate consumers as we recommend.
[Translation]
Senator Henkel: I mentioned consumer fatigue, the fatigue of those who file complaints. Do you have any figures on the number of people who drop the complaint process because of how slow and complex it is? Do you have the number of people who accept a settlement below what they’re entitled to because they are exhausted by the process?
[English]
Ms. Bradley: When we consider complaint attrition, it is always a concern that consumers are not satisfied but simply give up on the process. We survey Canadians annually and ask them a number of questions, including, “Have you ever had a seriously dissatisfying experience with your bank?” And a follow-up question: “Did you complain formally, and did you escalate your complaint?” If people say, “No,” we ask, “Why didn’t you?”
The results of that survey — we will be publishing a special report on that later this year — are, perhaps unsurprisingly, that many people who do not pursue a complaint formally feel it would be pointless to do so, that it wouldn’t be worth their time and effort. Some report that they would just change institutions, and that’s their preferred course.
The Financial Consumer Agency of Canada did a study of this very issue in, I believe, their 2019 or 2020 special report on internal complaint handling for banks. They also highlighted this issue of complainant attrition, people just giving up on the process.
Since that report was issued, the Bill C-86 changes that took effect in 2022 have taken effect. One of the reasons for the significant increase in banking complaint numbers escalating to us, as I mentioned previously, is exactly because fewer customers are giving up on their complaints.
Whether it is perfect, I don’t know, but I think it is moving in the right direction.
The Deputy Chair: Thank you. I would encourage you to be brief with your responses.
Senator McBean: Based on the complaint data that you have mentioned, what types of fraud cases are most common, and how relevant are the measures in Division 16, Part 5 of Bill C-15 to those disputes? I’m wondering how the measures being made are lining up with what is happening.
Ms. Bradley: The most common fraud cases we see are e‑transfer fraud cases. They are usually as a result of a digital scam of some kind, either an impersonation scam or a digital scam of some kind.
The measures being proposed in Bill C-15 are going to be important in addressing some of those complaints. They are broad measures. They will also be important in ensuring that those complaints are being tracked and that there is system-wide data available.
Senator McBean: Are broad measures what is needed?
Ms. Bradley: Broad measures are important because they can have a system-wide impact. My understanding of the Bill C-15 changes is there is room for some regulation or specified products or services, for example, that can be turned on and off. I think that will be specifically responsive to some of the issues we see.
Senator McBean: You mentioned that the regulations that are coming are an important step, and you said others have said a first step. From your perspective, what amendments or complementary measures would strengthen Division 16’s ability to reduce fraud and to ensure fair treatment of consumers after loss?
Ms. Bradley: There is a broad range of potential public policy measures that could be taken. I was very encouraged to see the federal government’s consultation in late 2024 on some of the potential anti-fraud measures that are clearly being contemplated by the Department of Finance. The consultation paper demonstrated a real depth of contemplation, depth of thought and sophistication about the potential measures that they might take. I believe they received a good quality of responses to that consultation.
I think there is a range of things that are being contemplated and probably a significant range of public policy considerations that are going to go into that planning process.
Senator McBean: Excellent. I’m going to stay there and ask you, if you would, to be more specific. What is something that, if it were in Division 16, do you think would solve more problems before they came to you?
Ms. Bradley: The measures that we were consulted on that would make sense ran from enhanced detection measures, enhanced prevention measures, and limitations on liability for consumers. There was a broad range of measures that were contemplated and that the government is clearly considering.
We submitted a response letter to that consultation essentially supporting all of those measures, because all of them would be helpful to mitigating the harms that Canadians are experiencing and, to the earlier question, shifting that responsibility from the individual who has perhaps made a mistake and fallen victim to a scam to a more shared liability model.
Senator McBean: Thank you.
Senator Yussuff: Thank you for being here. Your opening statement left me wondering something. Based upon what you said, it is quite an indictment on the banking system, given what you are dealing with on a regular basis and the fact that consumers are left without any sense of real justice concerning the fraud they are dealing with on a regular basis. No matter where you live in this country, on a regular basis, we are consistently hearing about how damaging this is to the individuals who have limited means in the first place.
Here, we are studying a bill that had an opportunity to put measures in place that can get to holding banks more accountable for resolving this: yet we are told it is being considered in the other place, and maybe it will get here. How are we supposed to give consumers confidence that the limited measures proposed in this legislation will stop fraud in the system? We are supposed to all feel confident about it, including me, by the way; I use the same apps and system everyone else in the country does. If I were to be defrauded, I should not wake up in the morning thinking that the bank will in any way resolve my problem, based upon what you’ve said.
It is quite sad, to be honest with you. We are a first-world country with the ability to make legislation and regulations at a quicker pace to help people with limited means who get defrauded on a constant basis. Yet, the government seems to be dragging its feet to do what the right things to get us to that place.
How would you respond to that, given your responsibility to try to help mitigate some of these investigations of the banks to solve this problem?
Ms. Bradley: You point out a very important issue. I will say that I’m not aware of any specific thing that is a silver bullet that will stop fraud from happening or stop people from being victims of fraud. This is a problem around the world. Different countries and governments are trying multiple things to try to address this issue in their own jurisdictions, just as Canada is trying to grapple with it here.
Fraud is a complex problem, and the challenge is that fraudsters are ingenious. This is not the grandparent scam or the Nigerian prince tropes of old where the victims of fraud are often portrayed as being responsible for their own harms. The frauds we see every day are highly sophisticated and almost deviously ingenious in terms of how they ensnare people into giving up their credentials or their money.
The solutions that I’m aware of that have been implemented worldwide tend to take a very multipronged approach, and there is no consensus yet on exactly what it is that is the solution to this problem, as far as I know.
So, our view is that any movement toward fraud detection, prevention, reporting and information sharing is a positive.
Senator Yussuff: Given the data that banks are supposed to report, do you think the information we get from the bank is accurate to give us the real picture of what is going on with regard to consumer fraud? One of my colleagues, in an engagement with the Toronto Police Service, said that, from their perspective, the vast majority of fraud is not even reported by the banks to the agencies of government they are supposed to be reporting to.
Do you think the statistics we are getting from the banks are accurate? Do they represent what is going on?
Ms. Bradley: One of the changes in Bill C-15 that will be very meaningful is that there is a specific obligation on banks to identify, track and report instances of fraud. That will also represent an improvement over the status quo that will help inform a more national perspective on the fraud issue in Canada.
Senator Yussuff: Thank you.
Senator Ringuette: I have two quick questions.
First, you said that you were serving 1,500 financial institutions. So you are counting all the branches of the different banks.
Ms. Bradley: No, that includes a high number of small investment firms across the country. We have all of the banks, which are about 120 banks and federal trusts and loan companies, 115 or 120 credit unions, and the rest of the firms are in the investment industry.
Senator Ringuette: Okay.
Remind me again: Who supplies your operating budget?
Ms. Bradley: Our funding is 100% recuperated from participating firms, so they are from the fees that we charge.
Senator Ringuette: Colleagues, this puts the issue into context.
Then you said in your statement that you have no legal or regulatory means, and it is hard to bite the hand that feeds us. How often do you meet with OSFI, which does have some legal and regulatory means for these institutions in regard to the complaints that you are getting in the fraud cases — and the example you can provide OSFI to put pressure because they have the means to put pressure? How often do you meet with OSFI?
Ms. Bradley: We are regulated under the Bank Act, as well. To address the first part of your question — or the implication of it — we are entirely funded through fees from the industry, but I think it is important for context to understand that industry participants are required to belong to OBSI and to pay our fees. I don’t believe it presents a conflict of interest of any kind.
Senator Ringuette: I’m not implying that; I asked you a question, and you answered.
My current question is: How often do you meet with OSFI, which has some power to use that you have stated you don’t have?
Ms. Bradley: We do not have a reporting relationship to OSFI, but we do have a reporting relationship with the Financial Consumer Agency of Canada with which we meet regularly. It has the primary responsibility for market conduct regulation for Canada’s banks. We meet with them regularly. We extensively report our data to them and discuss issues and systemic issues with them.
Senator Ringuette: I have no further questions, chair.
[Translation]
Senator Dalphond: I believe an external audit is conducted every five years. The latest report from 2020 was quite positive. You are processing requests faster and faster, and the services are good. Congratulations. Often, we read the opposite. Well done.
I would like to get back to the topic of fraud, which my colleague Senator Yussuff raised earlier. You will have seen in Bill C-15 that banks will be required to report any fraud that is discovered or reported to them to the regulatory authority. However, this information will be kept confidential and will not be made public. When the bank representatives testified, I asked why this information was not being made public. I understood that they don’t agree with making it public. However, if consumers knew that Bank X had a 1% fraud rate and Bank Z had a 10% fraud rate, they might choose Bank X over Bank Z. This would promote consumer choice.
In your annual report, I see that you mention the complaints received, give the names of the institutions, discuss the size of the institutions, and indicate the number of complaints received for each one. We can therefore compare the figures and see that some have more complaints than others. Does publishing these figures create problems for the banks? After all, I don’t see why consumers shouldn’t know the number of fraud cases that each bank is required to deal with, detect, or fail to detect.
[English]
Ms. Bradley: At OBSI, we are fully committed to transparency and to public reporting of the data that we have that we think might be of interest to all of the stakeholders that we serve, whether that is consumers, regulators or financial services industry participants also. Our view is that it is helpful for a whole range of decision-making purposes. That’s a core commitment of ours.
[Translation]
Senator Dalphond: How is it that you have reached a plateau since 2023 or 2024 in terms of the complaints you receive? Does that mean the system is working well? Have you reached cruising speed? Is this a sign that people are no longer coming to you? In your opinion, what explains this plateau over the past two or three years? I don’t know if this is still the case this year, as I haven’t seen the latest figures.
[English]
Ms. Bradley: Hopefully, it is a plateau. We have experienced a lot of growth over the last few years. Something that we can observe over the 30 years that we have been providing this service is that there has been a steady growth in bank complaint escalation to OBSI literally every year for 30 years. There are a lot of potentially interesting reasons for that. I would like to believe, and I think it may be the case, that there is a growing awareness of consumers in Canada that they can escalate their complaints, that their complaints to banks or large financial institutions are not futile, and that they can assert their rights.
Having said that, we tend to see large changes in complaint volume when there is a change in the environment, either an economic downturn or a change in the regulatory structure that’s behind that.
The Deputy Chair: Thank you.
Senator C. Deacon: Apologies to colleagues and to our witness, Ms. Bradley. I was asked by another committee to be answering media calls this afternoon. I do apologize. Mr. David Dlab, who works in my office, has been helping me keep up with the questions that have been asked that I have wanted to ask.
One that hasn’t been asked is around the reverse onus that the British have put in place with banks. Right now, there are a few things improving, but there are a lot of folks who are not experiencing that as much as they should.
As well, you did note the differences in fraud prevention practices between financial institutions. The best practices are not being generalized across the sector, and then we haven’t had good reporting as well from the banks. The Office of the Superintendent of Financial Institutions has their security and integrity rules, but they don’t get the data that they can count on as to which banks are doing the best job.
What is the opportunity around a reverse-onus approach where the banks are responsible for fraud unless they can prove that the customer is negligent or complicit and that they have gotten the evidence? Right now, it is the other way around. The customer has no evidence; the bank has it all. They are guilty until the bank decides they are innocent.
Ms. Bradley: Thanks for the question. It will be interesting to see the results of that policy shift, and it is early days for that in the U.K.
One of the issues that we face in applying the rules that currently exist is determining the boundaries of, for example, gross negligence, gross faults that exist for credit card products, and determining whether the consumer has been reasonable in their conduct, which is a standard that we apply when we are considering cases as well.
The level of proof that will be required is an interesting question. I can say from the cases that we deal with, the nature of the evidence is usually scant. The evidence might include the consumer story about what happened and the bank’s records of what exactly transpired in the account, for example, that the account was accessed from a certain IP address, that security questions were answered correctly or incorrectly, that there was or wasn’t biometric identification and the time stamps of how everything has been approached.
Very often, that’s the only evidence in a case. Thinking about how a reverse onus will be implemented on the ground is very interesting, and I look forward to talking to my colleagues about that at the Financial Ombudsman Service, in the U.K., as well as how they are actually deciding cases and whether it actually is working in the consumer’s favour.
Senator C. Deacon: Thanks very much. I have a one-minute follow-up.
One of the challenges I find is that there are a lot of substeps that can be put in place. You mentioned one earlier, that in international transfers, you have to turn it off. It is automatically turned on. There should be an opt-in rather than an opt-out. You should have the ability to put protections in place that the bank doesn’t allow for. E-transfers, for example, are just extra steps that allow that extra level of security. It may be more cumbersome for you, but some may choose that process to have more security.
It is that sort of effort right now that the banks are not making. It seems that whatever is easiest is what gets put forward, versus me, as a customer, having the ability to choose what is most secure and maybe have a little bit more cumbersome process as a result. There is no incentive for the banks to let me do that at this point.
Ms. Bradley: As I mentioned earlier, I think the Bill C-15 changes that give consumers the power to turn on and off designated features — it remains to be seen which features will be designated — but that is potentially very empowering to consumers. However, as you point out, one of the potential shortcomings is that the consumer has to know that they have that choice. They have to be able to assess the risk of the different elements that might be turned on or off. Public education will need to be an important component of that.
Senator C. Deacon: Or stricter regulation to ensure, in fact, that it starts there. Thank you.
The Deputy Chair: Thank you. I’m going to use the chair’s prerogative to ask a question. Not that I’m looking for a Band‑Aid on a cancer, because that’s what fraud is, but with the greatest respect, we have the ability for home insurance, auto insurance, life insurance, benefits insurance pretty much all offered by the banks, but when you look at the other product offerings, is there not room for fraud insurance through the bank’s product offerings?
Ms. Bradley: That’s an interesting idea. I would observe, though, that a limited liability regime is a form of shared risk, because when you have a limited liability regime — like for example, as exists for credit cards — that protection is being paid for by all users of credit cards. That is how fees work, and it is certainly a model that could be expanded to other product areas.
The Deputy Chair: Okay. senators, we don’t have much time, so what I would recommend is if you want to place your questions on the record, we will receive written answers back.
Senator Marshall: I think you were saying earlier that the institutions all have different policies or procedures, et cetera. My question is wouldn’t it be better for the consumer if there was some standardization with regard to policies and procedures instead of letting everybody go on their own?
The Deputy Chair: Thank you.
Senator Loffreda: You did mention that many consumers do know that they have access to an escalation process, and given the amendments, do you feel that it does improve access to redress? Also, given the sophistication of AI and the acceleration of the sophistication of AI — I mean, the numbers are baffling, $643 million lost to fraud by Canadians in 2024 — that’s amazing. It is a lot of money. Do you feel more should be done, or are these amendments sufficient? I find it is a good first step, but do you not feel that we should be going a little quicker in protecting the consumer? Or do you feel this is the most that could be done at this point in time?
The Deputy Chair: Thank you, senator.
Senator Fridhandler: I was surprised to see in your report investment dealers and Exempt Market Dealers, or EMDs, and investment other being federal agencies, and many of those are provincial, and at the same time, the jurisdiction for not only enforcement against some of these players comes from securities commissions, whether it is under their passport — national agreements or — and that the Canadian Investment Regulatory Organization, or CIRO, regulates and arbitrates somewhat complaints by investment. How do you work together with the provincial regimes and the enforcement mechanisms that they have?
The Deputy Chair: Thank you.
Senator Yussuff: You have a unique perch in the sense you have an international place in which you go and talk to your colleagues. Given what we are doing here in terms of best practices, are you getting more excited that you are going to get the tools necessary to do your job more efficiently and effectively?
The Deputy Chair: Thank you. Any other questions from the committee? Well, thank you, Ms. Bradley.
The Deputy Chair: For our second panel, we are hearing from three witnesses representing the Financial Consumer Agency of Canada, Ms. Shereen Benzvy Miller, Commissioner, and Mr. Frank Lofranco, Deputy Commissioner of Supervision and Enforcement, and Ms. Manon Bombardier, Deputy Commissioner of Research, Policy and Education. Ms. Benzvy Miller, I may understand that you have brief opening remarks. Following your remarks, senators will ask their questions. The floor is yours.
Shereen Benzvy Miller, Commissioner, Financial Consumer Agency of Canada: Good evening, members of the committee. Thank you for the opportunity to appear before you today.
[Translation]
We welcome the chance to contribute to the consideration of Bill C-15 by appearing before your committee.
Let me begin with a brief overview of our mandate and some of our recent work.
Our mission is to foster trust in Canada’s financial system by protecting financial consumers and empowering them to make informed decisions. Our work helps keep the financial system safe, fair and strong for everyone. This is a role we share with our regulatory partners, such as the Office of the Superintendent of Financial Institutions, which is responsible for prudential regulation.
[English]
As a regulator, we supervise the compliance of federally regulated financial entities, such as banks, with consumer protection measures set out in legislation, public commitments and codes of conduct. In addition to our supervisory role, FCAC leads and works with stakeholders across the country on a National Financial Literacy Strategy.
At the heart of our work is a commitment to preventing harm to consumers. This principle guides our research, policy and financial literacy efforts, and is the focus of our proactive supervision of the industry. We use data to identify risk, research to understand risk and supervision to address risk, and, when needed, we act swiftly.
For example, in early 2023, as Canadians were grappling with the financial impacts of the pandemic, we issued a regulatory guideline outlining our expectations for banks to proactively contact mortgage holders showing signs of financial stress that could put them at risk of default.
As of September 2025, more than 144,000 mortgage holders had been offered relief measures. This helped Canadians avoid more than $7 million in penalties and fees that would have resulted from late or missed mortgage payments.
No bank should ever benefit from a negative consumer experience. When financial institutions breach their market conduct obligations in ways that harm consumers, institutions should make those consumers whole.
As a result of FCAC’s supervision and enforcement, since 2024, more than $100 million has been reimbursed to consumers and businesses. In addition, since 2022, regulated entities have paid nearly $30 million in penalties for violations of consumer protection provisions. We publish the nature of each violation, the name of the entity and the amount of the penalty. This transparency, required by the Financial Consumer Agency of Canada Act, promotes compliance and builds trust and confidence in Canada’s financial system.
Beyond enforcement, our research and education collaborations with non-profit, public and private sector partners help lead to better financial outcomes for Canadians. For instance, we recently launched the Research and Data Exchange, or RDX, an online hub that gives Canada’s financial ecosystem clear, actionable data and insights, helping partners understand the trends and tailor their financial literacy programs to meet the needs of Canadians.
By turning complex research into actionable evidence, the RDX strengthens stakeholders’ ability to design, target and evaluate effective financial literacy initiatives.
[Translation]
Finally, Mr. Chair, I want to highlight the Financial Consumer Agency of Canada’s readiness to take on the supervision of amendments to the Bank Act to address consumer-targeted fraud.
We welcome the new amendments. Fraud is a serious and growing threat to Canadians’ financial well-being and the economy, both in scale and sophistication.
[English]
Budget 2025 includes other measures that impact FCAC, which will contribute to empowering consumers and advancing their interests. These include a proposal to introduce a code of conduct for the prevention of economic abuse for federally regulated banks, and a request that FCAC prepare a report on the structure, level and transparency of fees charged by Canadian banks.
My team has begun the study of fees, which we expect to complete in the spring. Our report will support the Department of Finance’s focus on improving competition and innovation in the banking sector, including a better understanding of the relationship between banking fees and competition.
[Translation]
In closing, I will underline that our expertise in supervision and enforcement, research on consumer behaviour and the evolving digital financial landscape positions the Financial Consumer Agency of Canada well for this work.
[English]
I look forward to the committee’s questions and to sharing how FCAC protects and empowers financial consumers across Canada. Thank you.
Senator Yussuff: Thank you for being here. I don’t envy your responsibility given the challenge we are faced with in regard to fraud in the banking and financial system in the country. From your experience, when consumers lose money to fraud, does the current complaint system actually get them their money back, or does it mean they give them the process without the remedy?
Ms. Benzvy Miller: Thank you very much for the question. We are very concerned about the prevalence of fraud and the impact it has on Canadians. You heard about it and were discussing it in your earlier session.
It is something that we are grappling with all the time and talking to our counterparts about. I am very optimistic about the impact of Bill C-15 in the sense that the prevention and detection provisions that every bank will have to put in place should go a long way to helping us understand what is happening to consumers in relation to fraud. We will also be reporting to the minister annually on the data and the trends that are happening in fraud because we will be asking all the federally regulated financial institutions to provide us with data with regard to how fraud is impacting their customers.
Senator Yussuff: That’s not the question I asked you, so I will repeat the question one more time.
Ms. Benzvy Miller: Please do.
Senator Yussuff: From your experience, when consumers lose money to fraud today, does the current complaint system actually get them their money back, or does it mainly give them a process without a remedy?
Ms. Benzvy Miller: The complaint process is one way to get their money back. The legislative framework which you were discussing earlier around liability is really the essential tool for determining whether people will be reimbursed and made whole. Each financial institution has to investigate thoroughly. The first remedy is to have a thorough investigation of what has happened, and the second is to determine who carries the burden. Legislatively, if it involves a debit card or a credit card, the liability rests with the financial institution.
Senator Yussuff: Do you believe that the changes or proposed changes in the legislation will enhance the ability of consumers to get banks to do what is necessary to provide them with greater protection than they have under current legislation?
Ms. Benzvy Miller: I am hopeful that we will move strongly in the direction of stronger protections, partly because fraud is really the responsibility not just for the financial sector but also the telecom and public safety sectors. One of the things about the proposed anti-fraud strategy is that it starts to look at a multidimensional response. It can’t just be on consumers or on the banks. Fraud is really a problem that we have to tackle from many directions, and I feel that we are moving toward solutions that will allow us to do that more than ever before.
Senator Yussuff: Thank you.
[Translation]
Senator Henkel: Thank you for being here and for the answers we are about to receive. This is important for this committee, but also for all citizens. It’s a vast subject, and I’m not sure we have all the right answers. I hope to get them from you.
In your latest business plan, you state that consumer protection must be based on fair business practices. However, each bank currently sets its own rules on fraud. How does this guarantee real and uniform protection for consumers?
Ms. Benzvy Miller: Thank you for the question.
I believe that uniformity of processes in banks is less important than the strength of these internal policies. It’s absolutely essential that each institution have policies and practices in place to detect and prevent fraud so that they can stop crime before it happens, before people become victims of fraud. As regulators, we will ensure that every bank not only puts policies and practices in place, but also has good training for their employees, because practices are only effective if employees know how to implement them.
Senator Henkel: Thank you. So you believe that uniformity of a system for greater transparency isn’t necessary, that banks should continue to operate in silos, in a unique way that is specific to them.
I’ll move on to another question.
Bill C-15 stipulates that banks must collect data on fraud and transmit it to your institution. However, there’s no obligation to publicly disclose this data, whether it be the number of cases, fraud rates, processing details, or reimbursement rates. So, if there’s no public access to this data, how can we verify that banks are actually improving consumer protection?
[English]
Ms. Benzvy Miller: The legislation doesn’t allow us to publish individual data because we collect data on a confidential basis, bearing in mind that the institutions rely on this confidentiality in order to function. We do publish data when there are egregious breaches. The need to know is such that the legislation has basically allowed us to publish aggregated data, data on trends and data that will help the public to, for instance, be more resilient and make better decisions related to fraud schemes that they come across. We can do all of that. Regarding the concept naming specific institutions, we can also do that when there is a violation of obligations of their market conduct and when they are found to be in breach.
In fact, three days ago, I actually published the name of a bank that was in breach, so we do it. The law allows and encourages us to do it. I think consumers will have what they need to make sound decisions.
[Translation]
Senator Henkel: Perfect. Are you saying that you can maintain, that you do maintain, or that you could maintain a chart that would allow consumers to know whether banks are good at managing these types of fraud and, of course, whether they are doing their best or are responsible for ensuring that consumers can choose the best bank to protect their rights? Do you have this kind of chart or public information on the quality of banks’ services when it comes to fraud protection?
Ms. Benzvy Miller: Yes and no.
[English]
We don’t rank banks. We are not in the business of ranking banks. We do supervision to ensure every bank is meetings its legal obligations.
You heard earlier about the consumer framework that they are all required to meet. There are numerous market obligations, including some that are now going to exist because of this piece of legislation. We supervise their compliance with that. If they are non-compliant, we do publish that, for example. When we find there is an anomaly, we will do a thematic review to look at a number of institutions to see if they are all having problems with that obligation. Then, we will publish the results of that without necessarily naming the institutions.
The impact of that is multifold because all the institutions read our thematic reviews. They look and say, “Oh dear, if they are non-compliant on that, we would be found non-compliant too.” They then take corrective action. We actually have compliance-enforcement conversations with banks every single day. We have at least 200 a year, so we are always talking to them about where they are in relation to meeting their obligations in various areas, and now it will include fraud.
Senator C. Deacon: Thank you for being with us. I actually want to ask about how you implement your responsibilities in different situations, for example, with consumer education. It is very hard to be effective from Ottawa with communiqués to a website that most financial consumers don’t know about.
About two years ago, there was an announcement of free bank accounts. You had worked for 15 months to get a list of banks that would offer free bank accounts, if I’m correct. The only thing I can find is an update from December 2025. I thought it was wild that you were negotiating for that period of time with the banks to get free bank accounts from some of them — some participated and some didn’t — rather than just publicizing those financial institutions that offer them. Let the market work. Give institutions that are already going to the trouble of doing it something special, and let the market work because you had to fight for 18 months or whatever it was to get the big banks to rise up.
I heard it again just a minute ago in your answer to a question that the banks rely on confidentiality as it relates to fraud so they can function. I bet they do. Imagine the banks that had a higher level of fraud than other banks were reported. The market would function and drive customers to those banks that have the best safety practices. Why are you not using market forces to help Canadian consumers?
Ms. Benzvy Miller: The role of the regulator is to supervise and protect. We work closely with at least 500 NGOs and various organizations that do market analysis. We provide a lot of the research that they then rely on. That’s why I mentioned the RDX.
Our role is not a market driver. Our role is to educate Canadians in terms of financial literacy so they know what questions to ask and what tools they can use, for example, when they do account comparisons, credit card comparisons or mortgage opportunity comparisons. We do financial literacy for financial wellness. We also work with a lot of community and grassroots organizations who use our information to do the kind of work you are talking about, which is more of a marketing assessment.
Senator C. Deacon: It’s not marketing. It is allowing markets to function.
What I’m wondering about in terms of the information and the education that you provide is: Do you have data to talk about what success that effort has in educating consumers relative to the size of the marketplace?
Manon Bombardier, Deputy Commissioner, Research, Policy and Education, Financial Consumer Agency of Canada: Thank you, senator, for the question. We have a number of tools on our website, and we get a lot of hits on them. They are very popular, so we know they are being used by a large number of Canadians. We also do experiments. For instance, we worked with schools and organizations like ChatterHigh to experiment with young women. By giving them the information they need to make decisions and build confidence, we have seen some very good results. Just by using a little bit of nudging and giving them the right information at the right time, we see good results, and we are working with educational organizations and community groups to build on these experiments at a national level. The tools are working, and we are working with the ecosystem to make them available.
Senator C. Deacon: What is the size of the market and how much of an impact are you having with your education activities?
Ms. Bombardier: We have a national financial literacy strategy, which we established a couple of years back. We are currently assessing the results, so we’re collecting the information from the last five years of applying this strategy. It looks at barriers to accessing information and to inclusion. We are looking at making it so they can act, and they do act on the information to make good decisions. We are measuring the results, and hopefully, later in the year, we will be able to publish that, so we will have those answers.
Senator Loffreda: Thank you for being here. Very interesting. I was reading that the banks are required to report consumer complaints to the Financial Consumer Agency of Canada and to publish their policies and procedures. Yet, the Financial Consumer Agency of Canada’s 2023 industry review of bank complaint-handling procedures found most banks lacked internal policies and procedures for accurately reporting the complaints and filed submissions that omitted required information about the complaints.
So how comfortable are you that the banks could be trusted to create their own policies and procedures for detecting and preventing fraud? Also, with the sophistication of AI, is our legislation sufficient? Have you analyzed or studied what that impact will be — the open banking impact and the sophistication of AI on fraud? I was noting previously the losses in 2024 of $643 million lost to fraud by Canadians. That’s a huge number. There is an impact on the economy.
Something more than what we are doing has to be done. What are your comments on that?
Frank Lofranco, Deputy Commissioner, Supervision and Enforcement, Financial Consumer Agency of Canada: I can address that. Thank you for the question.
There are a number of elements to your question. I think the first question you started with is how effective the requirement is for policies and procedures to be in place within institutions. That’s a fair question. Having policies and procedures in place is clearly the obligation, but from a supervisory perspective, it is about their effective implementation. Policies and procedures as they relate to complaints need to be implemented in a way that enables the timely and effective handling of complaints.
With respect to fraud, the proposal that institutions put in place policies and procedures and detection is less about what is written on paper and more about the exercise of implementation. That exercise of implementation to ensure the effectiveness of policies and procedures that are put in place for whatever objective is the business of supervision.
We do have experience in relation to complaints, which I think was the second part of your question. New standards came into place in 2022 with the Financial Consumer Protection Framework, for example, the requirement to handle complaints within 56 days. We have seen a marked improvement since then. Today, 97% of the complaints reported to us have been handled within 56 days.
I believe there was an earlier question in relation to how many of those complaints are dealt with in a way that satisfies the consumer. I can tell you that two thirds of the complaints reported to us have been handled in a way that the consumer is satisfied. It does leave one third of consumers who might not be, and they can escalate to an external complaint body.
That’s the context by which we do our supervisory work.
At the tail end, it does lead to enforcement actions. One hundred million dollars have been remediated to consumers for non-compliance that we have identified and investigated. At the front end, things like policies and procedures in our reviews are preventive in nature; we seek to address the risks before they become widespread or systemic.
Moving to what I believe was the third part of your question, fraud is a complex issue. It requires a whole-of-society, whole of ecosystem approach to deal with. From our perspective, we welcome the proposals and are happy to have a role in this regard because we can leverage our experience with institutions and how to supervise against things like policies and procedures that need to be effective. However, we also recognize we need to do that in partnership with other stakeholders.
From that perspective, I think it is a step in the right direction, and we are well equipped, at least in this regard, to ensure that banks implement requirements in a way that is effective and protects consumers from financial harm.
Senator Loffreda: Part of my question was about legislation and amendments to this bill. Do you feel they are sufficient to protect the consumer against the level of sophistication that we are seeing in fraud?
Ms. Benzvy Miller: I think we are moving progressively toward doing so. As you heard earlier, this a problem worldwide; every jurisdiction is struggling with this. I think we are moving progressively toward solutions that will be impactful and protect consumers.
One of the important things is the ability to collect data and get ahead of the trends and see what is happening to consumers. We have a number of tools we use to talk to consumers to find out what is happening to them. We use a monthly financial well-being monitor, which is research that helps us to put questions in to get feedback from consumers as to how they are actually being impacted by various things. We have the Canadian Financial Capability Survey, modular public opinion research, and tools in the National Financial Literacy Strategy. It is in those conversations with consumers where we will find out if the intended impacts of these legislative changes are improving their lives.
At the end of the day, we need to know what is happening on the ground, both in the banking system but also to consumers directly. It is that two-pronged approach. If you invite me back, I’ll be able to tell you whether this did point us in a better direction. I’m hoping it will, and I’m hoping that even getting fraud-based information from financial institutions and the breakdown in the complaints system related to fraud complaints will help us to assess whether the other measures are having the impacts they need to have in terms of protecting consumers day to day.
Senator Marshall: I was looking at the data on banking fraud. As you know, it has increased quite significantly over the last number of years. We keep hearing things like support, supervise, obtain data, analyze trends and have standards, but at this point in time consumers — and even some of us senators — would like to see progress, not just with the development of standards, supervision and things like that but actual resolutions that consumers will be happy with.
So, how do we get from the standards, the policies and the supervision into actual resolution so that consumers feel that the concerns about fraud are actually being addressed?
Ms. Benzvy Miller: That’s a great question. I’m going to ask Mr. Lofranco to talk about our graduated supervision approaches. It really is about supervising things at the coal face. When we say they need policies and procedures to prevent and detect fraud, we have to be working with the financial institutions to find out what they are actually doing in both of those areas.
Senator Marshall: I would appreciate it if you covered this aspect of every financial institution having their own. Maybe there should be some standardization and standardization at a lower level.
Mr. Lofranco: I appreciate the question. Thank you.
Currently, it is a fair statement to say that every institution manages fraud and allegations of fraud differently. The proposal to bring in obligations by way of policies, procedures and other requirements is an exercise in setting a higher standard and, from our perspective, standardizing how institutions will look to handle allegations of fraud and claims of fraud.
The obligation around policies and procedures will have that effect. It will set an expectation that policies and procedures are there to prevent, detect, and I would offer the word “remediate” against fraud experienced by their customers.
When those are established, we are in the business of actively monitoring compliance with that obligation. When we do reviews and identify best practices, and when we see gaps, we look to elevate the standard to deal with those gaps.
Ultimately, where there is non-compliance against obligations, we are empowered to deal with that through a graduated enforcement approach. That might be some fancy language to say this: If there is non-compliance, corrective action is required. If that non-compliance resulted in financial harm, consumers affected need to be made whole.
In the last three years, we have issued 600 enforcement actions. I can appreciate that half a dozen or so have made it to the public spotlight by way of monetary penalties, but the graduated enforcement approach equips us to enforce obligations once they are established by way of regulation.
Senator Marshall: Do you think there should be more detailed procedures or policies within all the financial institutions? When we are talking about policies, you think at a very high level. If a consumer has been defrauded, that’s great that there are policies there, but they want to see it translated into actual action or resolution. It seems to me that there is a gap there.
How are you going to close that gap? Are the proposed amendments going to give somebody the authority or wherewithal to close that gap? Standards are great, but I don’t think they are going to bring about people’s satisfaction that, yes, we are making progress on it.
Mr. Lofranco: I appreciate the question. I actually appreciate the nuance you are speaking to. I can speak from the perspective of complaints because those are obligations that exist today and that we have had several years in supervising against since 2022. When you think about policy procedures, yes, it represents a higher-level statement about what needs to be done. But I can tell you, using that example, the details matter. The requirement for complaints to be handled within 56 days, the requirement for an institution to inform the consumer on how the complaint is being handled, there is an obligation for the institution to help the consumer navigate the process, to deliver a final notice or decision and to support the consumer in escalating their complaint to the external complaint body. That’s an example where a reference to policies and procedures does cascade down to specific details that we are able to supervise against.
Senator Ringuette: To your credit, I see that you have some limited financial power to correct a big mistake, but it is still a voluntary code of conduct. My first quick question is how many financial institutions that issue debit cards are not part of, or have not volunteered to the code of conduct?
Ms. Benzvy Miller: The current code of conduct on economic abuse?
Senator Ringuette: There is the Canadian Code of Practice for Consumer Debit Card Services. It is a voluntary code. So my first question is of those entities, in regards to the code, how many have not volunteered?
Mr. Lofranco: Just a point of clarification. We do supervise legislation, codes of conduct and public commitments. In the case of the code, the code applies to all members of the Canadian Bankers Association. So all banks are subject to the obligations that sit in the code. When we use the term voluntary, as it relates to some other commitments, they can voluntarily enter into the obligations and attach those commitments, but once they sign up, the obligations are mandatory and they are subject to those obligations.
Senator Ringuette: Then it is a two-step process. They volunteer, and then they have to make a commitment. That’s what you just said.
Mr. Lofranco: No.
Senator Ringuette: That’s what I understood.
Ms. Benzvy Miller: Think of the codes of conduct as a piece of law.
Senator Ringuette: It is not a piece of law. It is a voluntary item.
Ms. Benzvy Miller: I’m just trying to answer your question. If you think of it as obligations, like ones that would be captured in a regulatory framework, if you think of it as that, instead of asking Parliament to pass it, the industry agrees we are just going to sign up for it. So it is called a voluntary code. But once you have signed up for it, it becomes something we can supervise, and compliance is obligatory. The truth is if they were not complying with it, it’s a little bit like OBSI was saying that there is no recommendation that they have made that a bank has not respected because the minute they do, then Parliament will step in and just make it a piece of legislation.
Mr. Lofranco: If I can just offer some precision using the example of Low-Cost, No-Cost. Low-Cost, No-Cost is a public commitment for which 14 institutions have signed on to. In the case of the code, it applies to all banks as a code, and we treat those obligations similar to those in legislation and regulation. There is a difference between public commitment and codes of conduct. I hope that clarifies it for you.
Senator Ringuette: I hope it is clarified for the people who are watching this meeting. For instance, you are talking about complaints that you are getting. You say that two thirds of them are agreeable to the consumer complaint. The witnesses from the previous entity, the ombudsman, said that they receive complaints also in regard to fraud, but only 20% are in favour of the consumer. And you are all collecting data like it’s the team‑of-the-century data. Why is it not possible for a consumer to be able to have one place to issue a complaint and that same place to have a resolution because you are both dealing with consumer complaints? You seem to have 66% favourability for the consumer, and the other agency says 20% for the complaints they are getting.
Ms. Benzvy Miller: The Financial Consumer Agency of Canada does not respond to complaints.
Senator Ringuette: You said the complaints you are getting, that two thirds are agreeable to the consumer.
The Deputy Chair: If you can wrap that up, you can provide that in writing.
Ms. Benzvy Miller: Yes. I would be happy to.
Senator McBean: Thank you for being here. I want to try to stay targeted on Bill C-15 and the divisions that we are talking about here. I’m wondering how Division 16 will expand or clarify the FCAC’s oversight role with respect to fraud prevention and consumer protection with the federally regulated financial institutions and what is new here. It seems to me you are already doing a lot. I get that, and I’m hearing you say, “We are doing a lot, we are doing good work.” I think there can be some trust there. What is new in Bill C-15 that is going to be most effective for you?
Ms. Benzvy Miller: Thank you for the question. I would say we are already doing a lot. What this does is this amps up our ability to do more and, specifically, to focus on fraud. For example, we already collect a lot of data around the problems that consumers are having in their complaint systems, for example, from the banks. This will allow us to specifically collect data related to the problems they are having with fraud. Previously, we did not have that. It will also allow consumers to have more choices about how they protect their accounts and their money. We will be able to supervise that banks are actually respecting those provisions and ensuring that consumers can make those choices. I think Ms. Bradley went into it in more detail, and I’ll save the time here, but if you can choose select features that are more protective of your account to accommodate your needs as an individual, then we can make sure that the banks respect those, and we can do reviews and assessments of the banks’ policies and procedures around those protections. So what this allows us to do is more of what we have been doing and do it better with more details and more focus on fraud specifically.
Senator McBean: What challenges do you see from implementing that? And what guidance would the FCAC provide to ensure the provisions deliver meaningful protection? I suppose I also want to ask what challenges do you see, because the legislation will give you the authority of enforcement. Is the authority of enforcement going to be new for you?
Ms. Benzvy Miller: We already have authority for enforcement, and we can actually issue fines or administrative monetary penalties, or AMPs, up to $10 million. We already have very strong enforcement provisions in our act. On Monday, we announced one of the AMPs that we had levied against an individual bank.
Ms. Bombardier: From an educational perspective, those will be new obligations on the banks but also for consumers. It will be important for them to understand what is available, what is changing, what they can do to protect themselves, what features they can select and what does that mean so we can work with consumers through education and literacy to make sure that they’re well positioned to use those protections to their advantage. They have their own responsibilities. Banks have responsibilities, but I think consumers have their own responsibilities as well, and we want to help them understand that at the same time.
Senator McBean: In closing the gap, I find there is a gap of fraudsters and the gap of the sheriff catching up. Is there anything missing in the legislation that would accelerate or be a better catalyst for closing the gap from your perspective?
Ms. Benzvy Miller: In your questioning you have all touched on sensitive areas that will require a lot of monitoring, and we will be in a better position to answer that when we have implemented these and tested them out. For instance, when we start to monitor the way in which financial institutions implement their employee training or even the way in which they promulgate or publish the information they need to give to consumers around the optionality they will have, we will be in a better position to know.
We play a very strong role in the financial community of providing advice to the Department of Finance around what we find because we are the ones at the coal face. We spend a lot of time with our colleagues talking about gaps in policy and regulatory frameworks to ensure that consumers are better protected. We are that voice at the table. We are constantly on the alert for what is the gap, what is missing, what should we do more of, less of, what could we do that would better serve consumers.
Senator McBean: Thank you.
[Translation]
Senator Dalphond: I have two questions. The first will be brief and the second will be a bit longer.
[English]
You referred to the press release issued regarding the Bank of Montreal two days ago. I go to the link of the summary of the proceedings, and it says that the Bank of Montreal was notified by your office on March 31, 2025, of the violation of some of the provisions regarding disclosure of conditions attached to a plan. The bank, within a month, on April 22, according to the summary, paid the amount of the penalty you were asking for, which is $4 million, and you did the press release two days ago, which is in February 2026. What is the gap between the payment in April 2025 and the fact that it is disclosed only now?
Ms. Benzvy Miller: The gap in timing really relates to a number of things, and it varies tremendously, but one of the other things that we look at, in that particular case, there were about 100,000 consumers impacted. Often we also ask the offending party to remedy the situation and reimburse the funds to the consumers. In a recent case, there was $71 million at play that had to be reimbursed to consumers. That actually takes a fair bit of time, and so we don’t want to announce all this until we have made sure that all the I’s are dotted and T’s are crossed to ensure that they have, for instance, reimbursed all of the consumers.
Just as a caveat, because I just said “all,” as many as they can find. The ones they cannot find, the bank has to make a charitable donation in an amount equivalent to if they had found them all.
Senator Dalphond: On that last point, $600,000 is 20% of the amount that was overcharged, was about $3 million, was not claimed or paid back and was given to charities. Don’t you think if, in April 2025, you had publicized the fact that the bank had accepted to pay and would reimburse the clients that maybe some clients who were not contacted would have shown up? I understand the amount, on average, was about $30, $40 per consumer.
Ms. Benzvy Miller: Actually, this is an average total for the consumer. Some consumers it is more or less because it could be over a longer period of time. Sometimes the variability is as much as $100 to $3,000 for a consumer. One could make that argument, but one could also make the argument that then you would be dealing with systems that maybe can’t do the triage between people who put up their hands saying, “I was a customer five years ago and it is me,” and that may create even longer delays for people to be reimbursed.
It is a process choice, and maybe it is not ideal. We do often review our choices. We’re looking right now at the way in which we do our administrative penalty processes.
Senator Dalphond: On top of the $3 million they have to pay back, they were fined $4 million by your organization. They agreed to pay it. I’m going to read from the summary of the proceedings, which is quite interesting for us in trusting banks to implement things. It says:
BMO estimates that a total of 101,091 customers were financially impacted. . . . The total penalty amount of $4M reflects, among other criteria, the degree of BMO’s negligence in failing to implement adequate controls and effective monitoring measures to prevent and detect the error, despite receiving over 500 customer complaints about the monthly plan fees charged.
It was a plan offered by the bank to attract clients. The evidence shows that it was poorly administered and poorly supervised. What kind of trust can we have in the banks? They received 500 complaints from customers, and they did not act. It took you to step in to get this done. How can we trust that they will be good at handling fraud and these types of things?
Mr. Lofranco: Thank you for the question. Just to situate our enforcement action, the maximum penalty we can issue is $10 million in relation to an AMP or a monetary penalty. In determining what the amount would be, several factors are considered. I think you can appreciate the degree of intent or negligence, the duration of the penalty itself, and the financial harm to consumers.
Senator Dalphond: I find the fine very good. It is over the amount that the bank collected. However, how can we trust them to implement what they are asked to implement?
Mr. Lofranco: You positioned the question as a question of trust. The way I would interpret that is the FCAC is here for a reason. There is a reason why you need a supervisor and a regulator to operate in the marketplace. It is for reasons like this. When there is non-compliance that does cause financial harm to consumers, it is important to have a watchdog who has the powers and the authority to act. Non-compliance will happen, and our priorities are for it to be addressed in a timely way and for consumers who may have experienced financial harm to be remediated, to be made whole. No bank should profit from a negative customer experience is the guiding principle.
Senator Dalphond: Thank you.
Senator Yussuff: I want to come back to this point that was asked by my colleague earlier in regard to data collection. Clearly, you collect data from the banks. They share data with you, which is important, and I appreciate that. But for us senators and parliamentarians to do our work, we are blinded by the fact that we don’t know what the data is. I understand confidentiality, but I think in a federally regulated system, which the banks operate within, the public has a right to know as much as they should know because it is about choices they can make about the institution they are patronizing.
Yet you are telling me you get this data, and it is supposed to be kept confidential and is not shared with the public. I’m at a loss to understand why that is, given that consumer fraud is a very personal matter for individuals that inflicts trauma, worries, care that should be taken. The more data we can publish, the more it will highlight for the public the problems we have, but more importantly, what we can do and what parliamentarians should do in regards to their duties and responsibilities. If the regulation and legislation are not there, we need to know.
The Deputy Chair: Thank you, senator. I don’t think we have time for a verbal answer, but we would be happy to receive your written answer. Thank you.
Senator C. Deacon: We have banks in Canada, and their Canadian operations generate four times the return on equity compared to their international operations. Our banks operate in a highly profitable closed market. You have a $55 million to $60 million per year budget. I just wonder about the extent to which your activities are not keeping up with the problem. You’re making your best efforts, but the problem is growing faster than your solutions can solve them.
I wonder if Bill C-15 is providing enough changes to round off that curve and turn it the other direction. I honesty question the ways you function. I don’t believe they are capable of turning the corner on this problem. You have to get market forces working for you. The AMPs, these are rounding errors in a minute of business in the banks. It is not effective. Public sentiment is effective. Let markets work. Disclosure of data is essential if we are going to start to solve these problems.
I would love for you to counter me on that, but I just don’t see how you can solve the problem.
The Deputy Chair: I’m certain they will find the question somewhere in that, and you are happy to respond verbally.
Ms. Benzvy Miller: I appreciate the offer of challenging you back. It really is the role of my partners at the Department of Finance.
[Translation]
Senator Henkel: I have two quick questions related to what has just been said. Do you feel that, for some banks, fraud has become a normal cost rather than a system malfunction? If so, how can a regulatory body like yours really change the culture of this system? We are all wondering the same thing.
This is my last question and it’s directed specifically at Canadians. If you had to explain to Canadian victims of fraud how the current system protects them, particularly our seniors, who are often vulnerable, what would you say to reassure them that you are there not only to protect them, but also to improve this system quickly?
[English]
The Deputy Chair: Thank you, Senator Henkel. Transcripts will be available tomorrow morning for both senators and the witnesses to refer to so that you are able to answer fulsomely.
Thank you to our witnesses. Your testimonies have been enlightening and invaluable to our pre-study. As always, thank you, senators.
This concludes our pre-study of Bill C-15. Our clerk has advised that we should expect a draft of observations from our analysts this week. We will discuss our observations next week before tabling a report in the chamber.
The next meeting of the committee will be tomorrow, Thursday, February 5, at 10:30 a.m. We will begin our study of Bill S-3, An Act to amend the Weights and Measures Act, the Electricity and Gas Inspection Act, the Weights and Measures Regulations and the Electricity and Gas Inspection Regulations. The sponsor is yours truly.
I want to take a moment to thank the staff who support our committee: our colleagues in our offices, our clerk, the analysts, the interpreters, the Debates team transcribing and editing this meeting, the committee-room attendant, the multimedia service technicians, the Broadcasting team, the Recording Centre, ISD and our page, Mr. Mirko Onufrak. Thank you all for contributing to a successful committee meeting.
(The committee adjourned.)