The Financial Consumer Agency of Canada (FCAC) issued a statement and a new compliance bulletin in response to recent allegations that certain employees of banks were pressured to upsell to consumers in order to meet unrealistic sales targets and keep their jobs.
FCAC Compliance Bulletin B-5 – Consent for new products or services states that its purpose is to reinforce FCAC expectations that federally regulated financial institutions obtain consumers' express consent for new products and services in accordance with regulatory requirements. The bulletin reminds institutions of the following expectations and requirements:
- Any communication with consumers that forms part of the interaction for seeking express consent must be clear, simple and not misleading;
- The institution must clearly explain that it is requesting consent in any communication that is part of the process of obtaining express consent;
- Communications with consumers must be clear and must not mislead consumers to believe that they are consenting to a promotion or reward; and
- Requirements and expectations apply equally if activities are outsourced and appropriate controls must be applied in connection with outsourced activities.
The FCAC expects institutions to:
- ensure that communication does not mislead consumers while obtaining their express consent;
- apply enhanced rigour in the processes and controls (monitoring, training and scripting) related to obtaining consumers' express consent;
- ensure that the act of obtaining express consent is compliant with regulatory requirements, even if done by a service provider; and
- review all disclosure to ensure that it is consistent with the Cost of Borrowing Regulations under the Bank Act and with the FCAC's CG-3 clear language guidance.
The FCAC has announced that it will examine institutions' business practices and will investigate any incidences of non-compliance as part of its industry review.
For further information on this topic please contact Sharissa Ellyn at Norton Rose Fulbright Canada by telephone (+1 416 216 4000) or email ([email protected]). The Norton Rose Fulbright Canada website can be accessed at www.nortonrosefulbright.com.