A short window of consultation in April by Finance Canada on its national anti-fraud strategy discussion paper may have not given individuals and organizations the time to provide the input they desired to provide, however Fair Canada did its best to parse through the entire paper with all its 50 questions and deliver some sound and meaningful recommendations. While now closed for comments, go to national anti-fraud strategy and read it for yourself. FAIR Canada’s response is at submissions.
FAIR Canada is a national, independent, not-for-profit organization known for looking out for and advancing the rights of financial consumers and investors. As stated in its submission, it does this in part by making “Informed policy submissions to governments and regulators.”
Its opening paragraph is worth citing here.
FAIR Canada strongly supports the Government of Canada’s initiative to develop a National Anti Fraud Strategy (the Strategy). Preventing and responding to fraud are crucial to protecting consumers, preserving the integrity of the financial markets, and maintaining confidence in the Canadian economy. Fraud has evolved into a large-scale, highly organized, and increasingly cross sector and cross jurisdictional criminal activity that causes widespread harm to consumers. It now represents one of the most significant and rapidly growing risks facing Canadians. In 2025 alone, Canadians reported losses of more than $700 million to fraud (up from $638 million in 2024), with the true impact likely much higher because most incidents go unreported.
Here are some highlights from this submission.
First, there is recognition that Canada is lagging behind other countries like the UK who are placing urgency and action to protect their citizens from fraud and support them through a reimbursement program if they do become innocent victims of a scam (e.g., impersonation and identity theft). Thus, the call “for Canada to move forward with a robust, comprehensive anti-fraud framework that strengthens preventions, improves redress, and better safeguards Canadians from the growing scale and sophistication of fraud.”
Another important point made by FAIR Canada is that a national strategy requires provincial participation across all financial service sectors. Without support and buy-in form the provinces who regulate credit unions and investment dealers, there will be a huge gap in how Canadians are going to be better protected from fraud based on implementing a strong national anti-fraud strategy. As Fair Canada states, “it does not articulate a clear plan for engaging provincial financial regulators, despite their central role in overseeing large parts of Canada’s financial system.” The entire Canadian banking eco-system needs to be addressed when it comes to tackling fraud and the untold damage it is doing to thousands of victims and the economy.
Some provincial authorities are already sensitive to the fraud issue as exemplified by Ontario’s Financial Service Regulatory Authority’s Vulnerability Framework. Through leadership of their former Chief Consumer Officer, the FSRA has identified how vulnerable consumers can be to life events and other circumstances, so better protection of them needs to be a part of their actions going forward.
This gets into how Ontario’s financial institutions under their control are acting in terms of protecting their clients’/members’ savings and investments. A goal of the FSRA’s Vulnerability Framework is strengthening protections which will lead to better outcomes for vulnerable consumers. FSRA has defined vulnerable consumers as” an individual who is at higher risk of experiencing financial mistreatment, hardship, or harm, due to various factors and personal circumstances, including health, social, and economic factors, as well as major life events.”
Prior to developing the Vulnerability Framework, the FSRA brought in what is called a Market Conduct Framework (MCF) in 2021 and it includes credit unions being required to adopt a Market Code of Conduct. The main objectives as set out in their guidance are:
An MCF promotes better conduct for a credit union by:
- Detailing how the credit union should behave to ensure fair outcomes for its members and customers by prioritizing treatment of members and customers across the entire organization.
- Promoting consistent conduct standards across the entire credit union and among all levels of its business.
- Setting clear accountability within the credit union for implementation and oversight.
- Building trust amongst members / customers and the general public to protect the industry’s reputation.
The Vulnerability Framework gives more credence and urgency for credit unions in Ontario to follow and adhere to an effective market code of conduct which recognizes vulnerable consumers.
The extensive research work done by the UK on vulnerability led in part to adopting their Consumer Duty in 2023 and mandatory reimbursement of Authorized Push Payment (APP) scam victims in 2025. The Consumer Duty under the UK’s Financial Conduct Authority (FCA) sets higher, clearer standards of protection requiring financial firms to put customers’ needs first and deliver good outcomes. It mandates acting in good faith, avoiding foreseeable harm, and supporting customers’ financial objectives.
It should be noted that a number of UK’s leading banks volunteered to reimburse victims of APPs starting in 2019 but in the end not enough of them followed suit so it was made mandatory. Will one or more of Canada’s big six banks be willing to get ahead of Canada’s anti-fraud measures and champion APP reimbursement?
Another example is the Ontario Securities Commission (OSC) participation in what is called Operation Atlantic. It is part of an international joint law enforcement partnership with the US and UK to shut down cryptocurrency scams.
A final positive and supportive provincial consumer direction which Canada can embrace and learn from is in Quebec. Legislative amendments to its Consumer Protection Act limit liability for both unauthorized and authorized use of deposit accounts. Québec is shifting responsibility and accountability to their financial institutions to protect their consumers from being defrauded of their savings held in a banking account.
FAIR Canada calls on the federal government to build on our well established federal/provincial ministerial intergovernmental framework on financial services to immediately bring in provincial coordination and collaboration on this prominent issue. It also wants to see “through the Canadian Securities Administrators and Heads of Agencies to harmonize standards across jurisdictions.” This is certainly in keeping with the current priority to breakdown internal trade barriers within our country and see uniformity of standards across all provinces and territories.
With respect to Fair Canada’s C section headline entitled Dispute Resolution and Consumer Redress, it delves into this area extensively so not a lot to add in this regard.
As a blog where the domain title of novaultnofault.com connotes lack of protection and accountability by our financial institutions in Canada, a few comments warrant making here.
The first few sentences to the introduction bear repeating.
We are pleased that the Strategy addresses dispute resolution for fraud victims who believe their service providers failed to uphold their anti-fraud obligations. Ensuring the victims have access to a fair and effective dispute resolution process is critical, as it holds providers accountable for their actions and provides a pathway to compensation for losses resulting from these failures. Effective redress mechanisms also reinforce public trust in the anti-fraud framework.
Good points are made covering minimum standards to ensure consistency and fairness in a complaint process, thus making it easier to file a complaint and remove unnecessary barriers to do so. Fair Canada notes the timeline of 56 to 60 days (about 2 months), outlined in the federal Financial Consumer Protection Framework and for investment dealers in Quebec, is a reasonable one to use as a default.
It also recommends there should be a single point of entry for cross-sector complaints if the case goes beyond the financial institution’s direct involvement and all complainants should be provided with a “ detailed written response explaining how the complainant was handled, the reasons for the outcome, and the relevant anti-fraud obligations.”
An important aspect of a single complaint body is its power to render binding decisions for consumers. Consumers are then assured “that their complaints will result in meaningful outcomes rather than mere recommendations” which the financial institution does not have to follow or at best they will reduce and offer a low-ball settlement.
Presently Canada’s Ombudsman for Banking Services and Investments (OBSI) can only make non-binding decisions when they rule in favour of the complainant. As Fair Canada states in this submission, “Binding decisions enhance consumer confidence, provide finality for the parties, and prevent firms from undermining the dispute resolution process.”
FAIR Canada supports the Strategy call for if the External Complaint Body (ECB) becomes aware of serious non-compliance with the anti-fraud framework, it should be shared with regulators. “This information sharing would enable regulators to provide guidance to firms, initiate regulatory reviews, implement preventive measures, and/or take enforcement action.”
Moreover, public report metrics such as complaint volumes, nature of complaint (e.g., investment fraud), response timelines and outcomes should be part of Canada’s anti-fraud strategy regime. The UK is already showing how this can be done with their solid metric breakdowns on APP reimbursements.
Along the lines of the information sharing requirement for non-compliance, FAIR Canada takes it one step further and calls for a “robust process to identify, address, and publicly report systemic issues arising from complaints.”
As explained and elaborated on, FAIR Canada states, “When systemic issues are detected, the ECB should notify the regulators so they can develop solutions and drive industry-wide reforms, contributing to a safer marketplace for Canadians.”
While not knowing exactly how Peter Routledge, the Superintendent of Financial Institutions, is responding to TD Bank’s charges by the US Department of Justice in 2024 with the levy of $3 billion in fines for being complicit in enabling money laundering for a number of years through a number of its US branches, by not monitoring thousands of suspicious transactions, it is safe to say when recently retired long-time anchor of Bloomberg News anchor Andrew Bell interviewed him after this high profile and public ruling came down in the US, there was no sense of reassurance from him to emphatically state that TD Bank and other Canadian banks are upholding there anti-money laundering and fraud prevention obligations in Canada.
The above egregious transgression by TD Bank in the US may well be a discovery if something similar was determined by ECB to be one of a systemic issue in Canada (e.g., failure to monitor suspicious transactions on a regular basis over a sustained period of time) it would have to be followed up on and communicated to regulators so steps could be taken to prevent it from happening again without substrative fines and remedial actions required.
FAIR Canada refers to the UK as a farmwork for Canada to possibly model for consumer redress and organizational accountability. Australia’s Fraud Prevention Framework, which has been inspired by actions the UK has been taking should be also examined and looked at by Finance Canada. This novaultnofault.com blog does a breakdown of Australia’s Fraud Prevention Framework. Check it out under the category New Initiatives.
Where systematic accountability comes in with regard to the UK reforms is by virtue of requiring both the sending and receiving banks of a consumer money transfer to be on the hook to reimburse an individual 50/50 if in fact it was a fraudulent transaction where the duped scam victim was not grossly negligent in authorizing the payment. They unknowingly are sending money to the fraudster’s account or what is known as a mule account since it has been set up for the express purpose of laundering money to proceeds of crime.
FAIR Canada says in reference to the UK fraud prevention system “it recognizes that financial institutions are often better positioned than consumers to detect anomalous payment patterns and intervene before funds are lost but preserves incentives for consumer caution and awareness.”
Another important aspect of the UK reforms is recognizing insider involvement in setting up an innocent consumer victim to send money to a mule account.”
Organizations can be held criminally liable where an employee or other associated person commits fraud for the organization’s benefit, and the organization lacked reasonable fraud prevention procedures. This approach shifts the focus from isolated misconduct to organizational accountability, reinforcing the expectation that firms must proactively manage fraud risks than rely solely on post-incident responses.
A final point made by FAIR Canada here which is highly commendable is “the Strategy should adopt the core principle that where financial institutions and other intermediaries are best placed to prevent, detect, or interrupt fraud, they should bear clearly defined and enforceable responsibilities, including reimbursement obligations.”
Moreover, FAIR Canada states, “Embedding this principle would better align incentives, encourage investment in fraud-prevention systems, and ensure that the fraud losses are not disproportionately borne by consumer’s who lack the information or tools to protect themselves.”
Getting to the final three denoted sections of FAIR Canada’s submission on fraud data reporting and intelligence sharing, responsibilities of digital platforms and telecommunications and criminal enforcement as a core pillar of fraud deterrence, a few brief comments will be proffered.
Too many siloes when it comes to data collection, reporting if it is even done in a more public way, and same with intelligence sharing. The Strategy will need to “establish mandatory, standardized fraud data reporting into a centralized national repository.” As FAIR Canada recommends, “A unified system would allow regulators and police to aggregate reports across sectors, identify common actors and payment pathways, and connect related incidents.” By doing this, it will surely improve or enhance “earlier detection, faster disruption of active schemes, and more effective coordination across regulators, sectors, and police services.”
As for digital platforms and telecommunications providers, a Canadian anti-fraud framework needs to “assign clear, enforceable responsivities to these actors to prevent, detect and disrupt fraudulent content and activity.” They need to be accountable like our financial institutions when it comes to their responsibilities to detect and prevent fraud.
An example that comes to mind on a real fraud case is when a domain provider allowed a URL that was almost identical to BMO’s, so the fraudster had a much easier time convincing the victim they were a legitimate BMO financial portfolio manager. The domain provider based in the UK allowed a UK citizen to impersonate a major, highly visible and well-known Canadian bank. Why was this even allowed or not taken down soon after once identified?
Just restating and amplifying the section headline criminal enforcement as a core pillar of deterrence as the Strategy recognizes should be enough to make it clear Canada has to put utmost urgency and importance on this area. If not, the criminal networks and fraudsters will continue to exploit our weak regime when it comes to successfully prosecuting them with meaningful sentences and fines.
Aa FAIR Canada says, “compliance focused measures alone are insufficient to deter sophisticated or large-scale fraud schemes.” The bad guys need to know and come to understand they will be subject to a thorough investigation, prosecution and be convicted. It goes without saying more resources and support must be allocated to the criminal justice system (e.g., specialized investigative capacity) to be effective in serving Canadians as they should expect. This must include victim support and more ability and effort to recover money stolen from them.
FAIR Canada sums it up well by stating, “A robust enforcement pillar focused on timely investigation, effective prosecution, and accountability is essential to strengthening public confidence, disrupting repeat offences, and signaling clearly that fraud will result in serious consequences.”
