QUESTION PERIOD — Finance
Banking Fraud
November 6, 2024
Senator Gold, on October 29, the growing issue of bank-related fraud was examined by Radio‑Canada’s investigative journalism show “La facture.” The show highlighted how current regulations allow banks to treat fraud victims as complicit or negligent without providing any evidence. Today, only 16% of fraud cases are resolved. Currently, our banks arbitrarily decide that the victims are themselves guilty in 84% of cases.
In the U.K., banks have been forced to take responsibility, with the burden of proving fault commonly being placed on banks rather than victims. As a result, the banks invested in stronger fraud prevention systems.
Does the Minister of Finance realize that she is effectively enabling Canadian banks to resist investing in proven fraud prevention technologies, despite our banks being some of the most profitable in the world? What substantial action is she considering to prevent Canadians from becoming victims of fraud?
Thank you for your question.
Let me begin by assuring this chamber and Canadians that Canada and the Government of Canada has no tolerance for fraud of the kind you have described. I have been informed that the Financial Consumer Protection Framework, which was introduced in 2022, requires banks to address consumer complaints within 56 days of submission.
Customers who are unsatisfied with the resolution offered by their banks may escalate their complaint to their bank’s external complaint body, which will further investigate and make a determination on the merits of those complaints. The federal government is also taking action to ensure that Canadians are protected. This includes designating, as of November 1, 2024, an independent and transparent not-for-profit organization called the Ombudsman for Banking Services and Investments as the single external complaints body for Canada’s banking sector. This means that Canadians who feel they have been treated unfairly by their banks can access an impartial mediator to help resolve their complaints.
Thank you. Unfortunately, all these things you talk about are about resolving fraud once it has occurred. Our banks’ primary job is to protect our savings. If robbed in the past, they were responsible. Today, it is their customers who are being robbed, mainly due to the banks’ outdated processes and digital systems.
Is this government considering measures to reverse the onus of proof, putting banks — rather than victims — in the position of preventing fraud?
I am not aware of current plans, legislative or otherwise, in that regard. I do note, however, that legislation that is currently before us to enhance our cybersecurity might go some distance toward also providing a new environment or ecosystem, because fraud can take many forms, including cyberattacks, phishing and the like.
