Your bank can withdraw its fraud settlement offer if you escalate — Canada's banking watchdog says it's a systemic problem

In its 2025 Annual Report, released March 13, 2026, OBSI described a pattern of banks withdrawing settlement and goodwill offers made to fraud victims who escalate complaints to OBSI, or explicitly threatening to pull those offers if escalation occurs.

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What OBSI’s 2025 report said about bank settlement withdrawals

OBSI isn’t a regulator, but it serves as Canada’s independent external complaints body (ECB) for federally regulated banks. In practical terms, it’s the final stop for consumers who can’t resolve a dispute through their bank’s internal complaint process. Let’s just say its hands are full. In 2025, OBSI, operating in an expanded role, handled more than 26,000 consumer inquiries and over 6,100 formal investigations, nearly double the previous year’s complaint volume.

Fraud was by far the biggest driver of banking complaints. It accounted for roughly one-third of all banking investigations, with fraud-related cases nearly doubling year over year to 1,815. Against that backdrop, OBSI reported three systemic issues to regulators. Two of them have direct implications for banking customers.

First, some banks were wrongly holding customers liable for fraudulent transactions that occurred while the consumer was in the process of reporting the fraud. These are circumstances in which federal and provincial laws and voluntary codes explicitly protect consumers. Second, and more broadly, banks have been found to withdraw or threaten to withdraw settlement and goodwill offers when consumers escalate to OBSI.

OBSIs reporting should serve as a warning signal to regulators that bank conduct is undermining the consumer protection framework and warrants a response.

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Your right to escalate without penalty: what the law says

Under Canada’s Financial Consumer Protection Framework, bank customers have the right to escalate an unresolved complaint to an external complaints body. That right is not conditional on surrendering a settlement offer already on the table. OBSI’s position, as reflected in its 2025 annual report, is that banks threatening to withdraw offers as a condition for staying out of the OBSI process are undermining that framework.

The Financial Consumer Agency of Canada (FCAC), the federal consumer protection watchdog for banks, appeared before the Standing Senate Committee on Banking, Commerce and the Economy in February 2026 and reaffirmed its supervisory role over banks’ complaint-handling obligations. Under the framework, banks must address complaints within 56 calendar days and provide consumers with a final written response.