Every brokerage and administrator must designate an individual to handle complaints. This person does not need to hold a mortgage broker or agent licence, but the individual must be an employee of the brokerage or administrator or a person who is authorized to act on its behalf. The brokerage can designate more than one person to handle its complaints.

As required under section 9 and 8 of Ontario Regulation (O. Reg.) 188/08: Mortgage Brokerages: Standards of Practice and Ontario Regulation (O. Reg.) 189/08: Mortgage Administrators: Standards of Practice, a brokerage or administrator must provide a written response to complaints made in writing to the brokerage (about its mortgage business activities, or those of any broker/agent of the brokerage) or the administrator (about its mortgage administration activities).

At a minimum, the response must:

  • Be provided in writing.
  • Set out the brokerage’s or administrator’s proposed resolution.
  • Inform them that if the proposed resolution is unsatisfactory, and the complaint relates to a contravention of the Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA) or regulations, they can refer it to the Financial Services Regulatory Authority of Ontario (FSRA).

For a brokerage, this response is often referred to as the brokerage’s “final position letter.”

Reasonable timeframe

The brokerage must provide a response to the complainant within a reasonable timeframe. If the complaint is urgent, the Principal Broker should respond expeditiously.

Note: If the complaint relates to a non-qualified syndicated mortgage, the brokerage must provide FSRA with a copy of the complaint and the brokerage’s response within 10 business days after receiving it.

When FSRA receives a consumer complaint that is not accompanied by a brokerage’s response/final position letter, it will notify the mortgage brokerage or administrator and set a deadline for responding. If the mortgage brokerage or administrator cannot provide a response within the specified timeframe, they should contact the FSRA Compliance Officer who requested the response to provide the reason and request an extension.

Required documentation

Legislation requires that mortgage brokerages and administrators keep a record of all written complaints and responses. This information also needs to be reported in the annual information return that must be submitted by March 31 of each year.

While mortgage brokerages and administrators are not required to document verbal complaints and the responses, it’s good practice to maintain a log of all complaints, including verbal complaints, as they can be useful in determining trends or patterns.

If a consumer refuses to submit a complaint in writing, or prefers that their complaint be dealt with verbally, the brokerage or administrator is not required to provide a response in writing. But, as a best practice, they may wish to provide the complainant with a response in writing for recordkeeping purposes.

Written complaints form part of the required records of the brokerage or administrator and must be kept for a minimum of 6 years. More information on required records and record retention obligations can be found in O. Reg. 188/08, sections 46-48 for a brokerage and O. Reg. 189/08, sections 29-31 for an administrator.

If a brokerage receives a complaint about an incident that involves a mortgage broker or agent who now works for another brokerage, the complaint should be handled by the mortgage brokerage under which the licensee was authorized to work for at the time of the incident.

Regulatory actions

When mortgage brokerages, administrators, brokers or agents are found to be in contravention of the MBLAA or regulations, FSRA has a range of regulatory responses available. Regulatory actions (e.g., warnings, cautions, licence conditions, administrative monetary penalties, compliance orders, revocation/suspension of licence, laying charges under the Provincial Offences Act, etc.) depend on the type and severity of non-compliance.