Summary of stakeholder comments – Public warning notices Guidance | Financial Services Regulatory Authority of Ontario

Purpose of consultation

The Public Warning Notices Guidance (the Guidance) aims to:

outline the process through which FSRA may issue public warning notices to notify consumers / the general public about unlicensed activity, or other improper dealings with FSRA-regulated products and services, and the basis for such warnings
ensure transparency of the public warning notice process and that procedural fairness is afforded to an individual or entity who is the subject of a public warning notice
provide confidence to consumers that the information is credible

Outcome of consultation

As a result of the consultation, the following changes have been reflected in the final version of the Guidance:

an example of an “improper dealing”
additional detail on the steps FSRA takes prior to issuing a public warning notice
additional detail on FSRA's strategy for generating public awareness
establishing that the public warning notice reflects a compliance scenario at a specific point in time

Feedback from the sector:

FSRA received 4 submissions with feedback on the Public Warning Notice Guidance during the 30-day consultation period. The submissions and comments are also available on FSRA’s website. Only the feedback relevant to the Public Warning Notices Guidance is reflected in this summary.

FSRA thanks all commenters. FSRA carefully considered all comments before finalizing and issuing the Guidance.

Contributors:

The following stakeholders took the time to share their perspectives with FSRA:

	Organization	Commenter
1	Insurance Bureau of Canada (IBC)	Amanda Dean
2	FSRA Consumer Advisory Panel (CAP)
3	Ontario Trial Lawyers Association (OTLA)	Matt Caron
4	Canadian Life and Health Insurance Association (CLHIA)	Luke O’Connor

Feedback summary and FSRA’s responses:

Support for Guidance

Stakeholders	Summarized comment	FSRA’s response
IBC CLHIA CAP OTLA	The majority of stakeholders support the overall approach and intent of the Guidance.	FSRA is pleased that stakeholders support the overall approach and intent of the Guidance.

Media / public awareness strategy

Stakeholders	Summarized comment	FSRA’s response
CAP OTLA	A stakeholder expressed concerns that FSRA’s media / public awareness approach may not reach the intended audience. Stakeholders support the implementation of additional strategies to broaden the reach of the public warning notice. This could include: enhanced social media strategies partnerships with consumer protection organizations / non-profits creating a mobile app or integrate information into already existing financial services apps explore further collaboration with news media, television, etc. translate public warning notice into multiple languages use info graphics and interactive content A stakeholder supports periodic assessments of FSRA’s communications strategy to ensure it remains effective.	FSRA agrees that public warning notices should have a broad reach to ensure consumers have access to important information. FSRA will consider all of the suggestions and how they could be incorporated into the overall media / awareness strategy for public warning notices. The Guidance has been revised to include some additional detail on FSRA’s media strategy.

Stakeholders

Summarized comment

FSRA’s response

CAP
OTLA

A stakeholder expressed concerns that FSRA’s media / public awareness approach may not reach the intended audience.

Stakeholders support the implementation of additional strategies to broaden the reach of the public warning notice. This could include:

enhanced social media strategies
partnerships with consumer protection organizations / non-profits
creating a mobile app or integrate information into already existing financial services apps
explore further collaboration with news media, television, etc.
translate public warning notice into multiple languages
use info graphics and interactive content

A stakeholder supports periodic assessments of FSRA’s communications strategy to ensure it remains effective.

FSRA agrees that public warning notices should have a broad reach to ensure consumers have access to important information.

FSRA will consider all of the suggestions and how they could be incorporated into the overall media / awareness strategy for public warning notices.

The Guidance has been revised to include some additional detail on FSRA’s media strategy.

Purpose and scope

Stakeholders	Summarized comment	FSRA’s response
OTLA CLHIA IBC	Stakeholders support greater clarity as to the threshold, intent and scope for issuing public warning notices related to an “improper dealing”, including clarity on the type of activity that would be considered “improper dealing”. A stakeholder suggested replacing the term “improper dealing” with “unfair or deceptive acts or practices”, which is a term that is defined in the Insurance Act. A stakeholder supports public warning notices only for blatant engagement in unlicensed activity.	An “improper dealing” includes, but is not limited to, fraudulent activity or a scam related to a financial services product (typically related to a FSRA regulated sector). To provide additional clarity, FSRA has revised the Guidance to include the above example. It is not FSRA’s intention to issue public warning notices when there has been an unintentional lapse in licence. The decision to issue a public warning notice should demonstrate a risk to consumer harm and/or clear indication of an improper dealing or unlicensed activity that has been verified. The Guidance has been amended to clarify this.

Stakeholders

Summarized comment

FSRA’s response

OTLA
CLHIA
IBC

Stakeholders support greater clarity as to the threshold, intent and scope for issuing public warning notices related to an “improper dealing”, including clarity on the type of activity that would be considered “improper dealing”.

A stakeholder suggested replacing the term “improper dealing” with “unfair or deceptive acts or practices”, which is a term that is defined in the Insurance Act.

A stakeholder supports public warning notices only for blatant engagement in unlicensed activity.

An “improper dealing” includes, but is not limited to, fraudulent activity or a scam related to a financial services product (typically related to a FSRA regulated sector).

To provide additional clarity, FSRA has revised the Guidance to include the above example.

It is not FSRA’s intention to issue public warning notices when there has been an unintentional lapse in licence. The decision to issue a public warning notice should demonstrate a risk to consumer harm and/or clear indication of an improper dealing or unlicensed activity that has been verified. The Guidance has been amended to clarify this.

Information sharing

Stakeholders	Summarized comment	FSRA’s response
CLHIA IBC	Stakeholders support information sharing / notification strategies with FSRA’s regulated sectors prior to issuing a public warning notice. For example: A first step notice to insurers at the same time as notifying the individual or before the public warning notice is used (if the regulated individual or entity is to be named). Inform relevant industry associations, which could notify their members. A stakeholder suggested that FSRA establish an internal timeline for the length of time between confirmation of unlicensed activity and when it notifies industry associations. A stakeholder supports FSRA outlining a path for insurers that would identify which organization should be notified first if they encounter unlicensed activity (e.g., FSRA, police services, etc.)	FSRA processes the review and consideration of public warning notices in an expedited manner so as not to prolong the potential for consumer harm. Typically, subjects of a public warning notice are not affiliated with a FSRA-regulated entity. Should a FSRA-regulated individual or entity be named in a public warning notice, they are typically aware of the situation surrounding the unlicensed activity or improper dealing before it is published. FSRA expects regulated individuals / entities to report potential fraud to the appropriate law enforcement agency, in addition to informing FSRA, after they have investigated the matter. FSRA will consider the suggestions relating to advance notification.

Stakeholders

Summarized comment

FSRA’s response

CLHIA
IBC

Stakeholders support information sharing / notification strategies with FSRA’s regulated sectors prior to issuing a public warning notice. For example:

A first step notice to insurers at the same time as notifying the individual or before the public warning notice is used (if the regulated individual or entity is to be named).
Inform relevant industry associations, which could notify their members.

A stakeholder suggested that FSRA establish an internal timeline for the length of time between confirmation of unlicensed activity and when it notifies industry associations.

A stakeholder supports FSRA outlining a path for insurers that would identify which organization should be notified first if they encounter unlicensed activity (e.g., FSRA, police services, etc.)

FSRA processes the review and consideration of public warning notices in an expedited manner so as not to prolong the potential for consumer harm.

Typically, subjects of a public warning notice are not affiliated with a FSRA-regulated entity. Should a FSRA-regulated individual or entity be named in a public warning notice, they are typically aware of the situation surrounding the unlicensed activity or improper dealing before it is published.

FSRA expects regulated individuals / entities to report potential fraud to the appropriate law enforcement agency, in addition to informing FSRA, after they have investigated the matter.

FSRA will consider the suggestions relating to advance notification.

Procedures for issuing a public warning notice

Stakeholders	Summarized comment	FSRA’s response
CLHIA IBC	Stakeholders suggested adding clarity to the Guidance regarding FSRA’s processes and procedures for issuing a public warning notice, including how FSRA will exercise its discretion and ensure procedural fairness and accuracy of information (e.g., how FSRA verifies the identity of the subject, how it engages with the subject, the process for investigating and establishing non-compliance or breaches, and whether individuals are offered the opportunity to respond to allegations). A stakeholder suggested that the public warning notice be issued only after all means of recourse are exhausted (e.g., appeal).	FSRA is a principles-based, outcomes-focused regulator. The process related to the issuance of a public warning notice is operational in nature, and is subject to change based on lessons learned and other relevant factors. The Guidance is intended to describe FSRA’s outcomes-based approach to issuing public warning notices that supports credibility, transparency and consumer protection. The Guidance has been amended to include FSRA’s high-level procedures, including contacting the individual / entity that is the subject of the public warning notice. FSRA takes reasonable steps to verify the identity of the subject of the public warning notice, including using key identifiers such as email address, mailing address, phone number, etc.

Stakeholders

Summarized comment

FSRA’s response

CLHIA
IBC

Stakeholders suggested adding clarity to the Guidance regarding FSRA’s processes and procedures for issuing a public warning notice, including how FSRA will exercise its discretion and ensure procedural fairness and accuracy of information (e.g., how FSRA verifies the identity of the subject, how it engages with the subject, the process for investigating and establishing non-compliance or breaches, and whether individuals are offered the opportunity to respond to allegations).

A stakeholder suggested that the public warning notice be issued only after all means of recourse are exhausted (e.g., appeal).

FSRA is a principles-based, outcomes-focused regulator. The process related to the issuance of a public warning notice is operational in nature, and is subject to change based on lessons learned and other relevant factors. The Guidance is intended to describe FSRA’s outcomes-based approach to issuing public warning notices that supports credibility, transparency and consumer protection.

The Guidance has been amended to include FSRA’s high-level procedures, including contacting the individual / entity that is the subject of the public warning notice.

FSRA takes reasonable steps to verify the identity of the subject of the public warning notice, including using key identifiers such as email address, mailing address, phone number, etc.

Duration of posting

Stakeholders	Summarized comment	FSRA’s response
CLHIA	A stakeholder suggested that FSRA provide additional clarity in the event the issue outlined in the public warning notice has been corrected. For example: Does the posting remain on the website in perpetuity, or is there a process for requesting the removal in certain circumstances or after certain timelines? Will FSRA update the public warning notice to reflect an issue that has been corrected or other relevant facts?	Public warning notices are meant to provide a picture of unlicensed activity / improper dealing at a point in time. Keeping the warnings on the FSRA website in perpetuity provides consumers with a historical picture of the financial services landscape and the individual / entity they may wish to engage for financial services. The Guidance has been amended to clarify this.

Stakeholders

Summarized comment

FSRA’s response

CLHIA

A stakeholder suggested that FSRA provide additional clarity in the event the issue outlined in the public warning notice has been corrected. For example:

Does the posting remain on the website in perpetuity, or is there a process for requesting the removal in certain circumstances or after certain timelines?
Will FSRA update the public warning notice to reflect an issue that has been corrected or other relevant facts?

Public warning notices are meant to provide a picture of unlicensed activity / improper dealing at a point in time. Keeping the warnings on the FSRA website in perpetuity provides consumers with a historical picture of the financial services landscape and the individual / entity they may wish to engage for financial services. The Guidance has been amended to clarify this.

Enforcement action

Stakeholders	Summarized comment	FSRA’s response
IBC	A stakeholder suggested that FSRA pursue formal enforcement action in all circumstances, rather than considering it. The stakeholder further suggested that formal enforcement action should be combined with a robust media strategy.	FSRA would pursue enforcement action with sufficient evidence.