Regulator fines firm $300,000 for inadequate complaint handling

TD Investment Services Inc. has entered into a settlement agreement with the Canadian Investment Regulatory Organization (CIRO), admitting that it had inadequate complaint handling and internal supervisory controls after it outsourced client complaint handling processes in late 2017. It outsourced the activity, including the investigation of misconduct by approved persons, to the parent company’s human resources department and an internal customer care unit. 

It agrees that between January 2017 and March 2021 it did not report 99 client complaints and 15 instances of reportable discipline of approved persons to the regulator. “The respondent admits that it failed to adequately supervise and train the personnel to whom it had delegated these responsibilities,” the reasons for decision (settlement) states. “In early 2021, (CIRO) staff became aware of multiple failures by the respondent to report – timely or at all – various events on the Member Event Tracking System.”

Failed to maintain adequate records 

They further add that the firm had not investigated or resolved all 99 complaints in accordance with the regulator’s rules and the firm’s own policies and procedures. The settlement agreement states that the firm did not resolve client complaints fairly in eight instances and 52 times it failed to maintain adequate records of its complaint handling actions. As a result, they say the firm could not determine if it had adequately investigated or resolved the complaints in question. “In most cases, the respondent had failed to communicate a final decision responding to the complainants.” 

Upon finding the deficiencies, TD Investment Services consolidated complaint handling with the customer care unit and provided updated instruction manuals to human resources personnel to communicate the firm’s reporting obligations. It also required human resources to notify the company about any discipline imposed on an approved person within two business days of the reprimand. Twice a week the firm also reviews all human resources files opened and closed to ensure reporting obligations are identified and communicated to CIRO. 

In the settlement agreement with CIRO, the firm accepted a $300,000 fine and agreed to pay the regulator’s costs in the amount of $25,000.