Reverse Mortgage Complaints: FCAC and Ombudsman Process Guide

You have a problem with your reverse mortgage lender and you have tried calling their customer service line — but nothing has changed. What do you do next? Filing a complaint about a reverse mortgage in Canada follows a structured escalation process, and knowing the right steps can mean the difference between a frustrating dead end and a meaningful resolution. This guide walks you through every stage, from the lender's internal complaint department to the FCAC and the external ombudsman.

This article is for educational purposes only and does not constitute financial advice.

Understanding the Complaint Escalation Ladder

Canada's financial complaint system is designed as a ladder. You cannot skip rungs. The system requires you to start at the bottom — with the lender — and work your way up if the issue is not resolved to your satisfaction.

According to the Financial Consumer Agency of Canada (FCAC), all federally regulated financial institutions must have an internal complaint-handling process, must respond within specified timelines, and must inform consumers of their right to escalate to an external body if they are not satisfied.

Here is the full escalation path:

The Four-Stage Complaint Process

Stage	Who You Contact	Typical Timeline	What Happens
Stage 1	Lender's front-line customer service	Immediate to 14 days	Initial attempt to resolve the issue informally
Stage 2	Lender's internal complaint department or ombudsman	30 to 90 days	Formal investigation by a dedicated complaints team
Stage 3	External Complaints Body (ECB) — typically OBSI or ADR Chambers	90 to 180 days	Independent review and non-binding recommendation
Stage 4	FCAC (regulatory complaint)	Varies	Regulatory investigation; FCAC does not resolve individual disputes but can address systemic issues

Rick Sekhon advises clients to document everything from the very first phone call. Write down the date, the name of the person you spoke with, what was said, and what was promised. This documentation becomes critical if the complaint escalates.

Stage 1: The Lender's Front-Line Resolution

The first step is always to contact the lender directly. For reverse mortgages in Ontario, this means:

• HomeEquity Bank (CHIP) — Call the customer service number on your mortgage statement or visit their website
• Equitable Bank — Contact their client services team
• Bloom Financial — Reach out to their support department

At this stage, you are dealing with front-line staff who may be able to resolve straightforward issues immediately. Common issues that are often resolved at Stage 1 include:

• Statement errors or incorrect interest calculations
• Miscommunication about payment or disbursement schedules
• Questions about specific terms in the mortgage agreement
• Requests for payout statements or discharge information

What to Include in Your Initial Complaint

Element	Details to Provide
Account information	Your mortgage account number and full name
Description of the issue	Clear, factual summary of what went wrong
Timeline	When the issue occurred and when you first noticed it
Impact	How the issue has affected you financially or personally
Desired resolution	What specific outcome you are seeking
Supporting documents	Copies of relevant correspondence, statements, or agreements

If the front-line team cannot resolve your issue within a reasonable time (typically 14 business days), ask to have your complaint escalated to the lender's formal complaint department.

Stage 2: The Lender's Internal Complaint Department

Every federally regulated financial institution in Canada must have a designated complaints officer or internal ombudsman. This is a separate team from customer service, and they have more authority to investigate and resolve complaints.

According to OSFI guidelines, federally regulated institutions must maintain documented complaint-handling procedures that include defined response timelines and escalation paths.

What Happens During the Internal Investigation

When your complaint reaches the internal complaint department:

1. Acknowledgment — You should receive written confirmation that your complaint has been received, typically within 5 business days.
2. Investigation — The complaint team reviews your account records, correspondence, and the actions taken by front-line staff.
3. Response — You receive a written response that either resolves the complaint or explains why the lender cannot meet your request.
4. Final position letter — If the complaint is not resolved to your satisfaction, the lender must issue a final position letter. This letter is your ticket to Stage 3.

The internal process typically takes 30 to 90 days. If you have not received a response within 56 days (the FCAC-mandated maximum for most complaints), you can proceed to Stage 3 without waiting for the final position letter.

Rick Sekhon has helped clients navigate this process and notes that the internal complaint department often has the authority to offer solutions that front-line staff cannot, such as fee waivers, interest adjustments, or process corrections. Do not assume the outcome will be negative — many complaints are resolved at this stage.

For broader context on your rights as a reverse mortgage borrower, see our guide on consumer rights under FCAC and FSRAO.

Stage 3: The External Complaints Body (ECB)

If the lender's internal process fails to resolve your complaint, you can escalate to an External Complaints Body (ECB). In Canada, there are two designated ECBs:

• OBSI (Ombudsman for Banking Services and Investments) — The ECB for most major banks, including HomeEquity Bank
• ADR Chambers Banking Ombuds Office (ADRBO) — An alternative ECB used by some financial institutions, including Equitable Bank

How the ECB Process Works

Step	What Happens	Timeline
Filing	You submit your complaint to the appropriate ECB with your final position letter	Day 1
Intake review	The ECB confirms jurisdiction and accepts the case	5-10 business days
Investigation	An investigator reviews documents from both you and the lender	30-90 days
Preliminary findings	The ECB shares its initial assessment with both parties	After investigation
Final recommendation	The ECB issues a non-binding recommendation	Within 120 days of acceptance
Lender response	The lender accepts or rejects the recommendation	30 days after recommendation

Key Points About the ECB Process

It is free. You do not pay anything to file a complaint with OBSI or ADRBO. The cost is borne by the financial institution.

Recommendations are non-binding. The ECB can recommend compensation up to $350,000 (for OBSI), but the lender is not legally required to follow the recommendation. However, if the lender rejects an OBSI recommendation, OBSI publishes the refusal, which creates reputational pressure.

You can still go to court. Using the ECB process does not prevent you from pursuing legal action. However, you generally cannot use both processes simultaneously.

Document everything. The ECB process is document-driven. The more organized your file, the stronger your case.

ECB	Maximum Compensation	Binding?	Used By
OBSI	$350,000	Non-binding (refusals published)	HomeEquity Bank and most major banks
ADRBO	Varies	Non-binding	Equitable Bank and some others

Rick Sekhon recommends consulting with a consumer protection lawyer before filing with the ECB, especially if the amount in dispute is significant. A lawyer can help you organize your case and ensure you are presenting the strongest possible argument.

Stage 4: FCAC Regulatory Complaints

FCAC plays a different role than the ECB. FCAC does not resolve individual disputes or award compensation. Instead, FCAC investigates whether the financial institution has violated a federal consumer protection law or regulation.

When to File a Complaint With FCAC

File a complaint with FCAC when you believe the lender:

• Failed to disclose required information (interest rates, fees, cost of borrowing)
• Did not follow its own complaint-handling procedures
• Violated the Bank Act or Cost of Borrowing Regulations
• Engaged in misleading or deceptive practices
• Did not honour cancellation or cooling-off provisions

According to FCAC, complaints can be filed online, by phone, or by mail. FCAC reviews each complaint and may initiate a compliance investigation. If a violation is found, FCAC can impose penalties on the institution and require corrective action.

FCAC Complaint Outcomes

Outcome	Description
Compliance investigation	FCAC investigates and determines if a regulation was breached
Administrative monetary penalty	FCAC can fine the institution for regulatory violations
Compliance agreement	The institution agrees to change its practices
Commissioner's decision	A formal ruling on whether a violation occurred
No further action	FCAC determines the complaint does not involve a regulatory breach

Even if FCAC does not resolve your individual dispute, a FCAC complaint creates a regulatory record that can influence the institution's future behaviour. Multiple complaints about the same issue can trigger a systemic investigation.

FSRAO Complaints for Broker-Related Issues

If your complaint involves the mortgage broker rather than the lender, the appropriate regulator is FSRAO (Financial Services Regulatory Authority of Ontario). FSRAO oversees all licensed mortgage brokers and agents in Ontario.

Issues FSRAO Handles

• Broker failed to disclose compensation
• Broker recommended an unsuitable product
• Broker engaged in misleading advertising
• Broker failed to act in the borrower's best interest
• Broker did not meet licensing or continuing education requirements

FSRAO can investigate complaints, suspend or revoke licenses, and impose fines. Unlike FCAC, FSRAO's jurisdiction is limited to Ontario, but since the majority of reverse mortgage originations in Canada occur in Ontario, this is highly relevant.

Rick Sekhon holds his FSRAO license in good standing and welcomes questions about broker obligations. Transparency about the regulatory framework is part of his commitment to client service.

For information on protecting yourself from problematic broker practices, see our guide on reverse mortgage scams and fraud protection.

Common Reverse Mortgage Complaints and How They Are Resolved

Understanding the most common complaint types can help you determine whether your situation warrants formal action.

Top Complaint Categories

Complaint Type	Example	Typical Resolution
Interest calculation errors	Balance is higher than expected based on the stated rate	Lender reviews and corrects the calculation; refund of overcharged interest
Disclosure failures	Fees were not explained before signing	FCAC investigation; potential penalty and corrective action
Prepayment penalty disputes	Penalty amount does not match what was disclosed	ECB review of the mortgage agreement; possible compensation
Service delays	Lender is slow to provide payout statements or process the discharge	Internal escalation usually resolves the delay
Elder abuse concerns	Family member pressured the borrower into the mortgage	FSRAO investigation of the broker; possible referral to law enforcement
Property maintenance disputes	Lender claims the borrower is not maintaining the property	Review of the mortgage terms and independent property assessment

Many of these issues can be prevented through proper disclosure and careful review before signing. Reverse mortgage eligibility starts with being 55 or older and owning a Canadian home — for the full criteria, read our eligibility guide.

How to Build a Strong Complaint File

Whether you are filing with the lender, the ECB, or FCAC, a well-organized complaint file dramatically increases your chances of a favourable outcome.

Essential Documents to Gather

Document	Why It Matters
Original mortgage commitment letter	Shows what was promised and disclosed
Mortgage agreement	Contains the binding terms
All correspondence with the lender	Shows the timeline and what was communicated
Account statements	Provides evidence of the financial impact
Independent legal advice certificate	Confirms what the lawyer explained at signing
Your complaint log	Dates, names, and details of every interaction
Cost of borrowing statement	Shows the original projections versus what actually occurred

Reverse mortgage funds are tax-free because they are a loan, not income — CRA does not tax any amounts received. For full details on the tax treatment, see our tax implications guide.

Legal Options Beyond the Complaint Process

If the complaint process does not produce a satisfactory result, you have legal options:

Small Claims Court — For disputes up to $35,000 in Ontario, you can file in Small Claims Court without a lawyer (though having one is advisable).

Superior Court of Justice — For larger amounts, a lawsuit in Superior Court may be appropriate. This requires a lawyer and can be expensive, but it provides the most comprehensive remedies.

Class action — If the issue affects multiple borrowers, a class action may be viable. Consumer protection class actions have been successful in Canada's financial services sector.

Rick Sekhon always recommends that clients try the complaint process first, as it is free and often effective. Legal action should be a last resort, but it is an important right that ensures lenders remain accountable.

The no-negative-equity guarantee on Canadian reverse mortgages protects borrowers from owing more than their home's value — for full details, see our inheritance guide.

If you are considering a reverse mortgage for retirement cash flow purposes or debt relief, knowing the complaint process in advance gives you confidence that protections exist should anything go wrong.

Prevention: How to Avoid Needing the Complaint Process

The best complaint is one you never have to file. Here are Rick Sekhon's top recommendations for preventing issues:

1. Read every document before signing — Do not rely on verbal explanations alone
2. Get independent legal advice from a lawyer who understands reverse mortgages — Not all lawyers are familiar with these products
3. Keep copies of everything — Store digital and physical copies of all mortgage-related documents
4. Ask questions — No question is too basic. If you do not understand something, keep asking until you do
5. Review your statements regularly — Check that the interest calculations and balance match your expectations
6. Communicate proactively — If your circumstances change (health, family situation, plans for the home), let the lender know

For information on how to protect elderly borrowers from financial abuse related to reverse mortgages, see our guide on financial elder abuse prevention.

Frequently Asked Questions

How do I file a complaint about a reverse mortgage lender in Canada?

Start by contacting the lender's customer service department to attempt an informal resolution. If that does not work, escalate to the lender's internal complaint department and request a final position letter. From there, you can file with the appropriate External Complaints Body (OBSI or ADRBO) and/or FCAC for regulatory concerns.

How long does the reverse mortgage complaint process take?

The full process can take 6 to 12 months if it goes through all stages. Stage 1 (front-line resolution) typically takes 1 to 14 days. Stage 2 (internal complaint department) takes up to 56 days. Stage 3 (ECB) can take 90 to 180 days. Each stage may resolve the issue, so not every complaint needs to go through all four stages.

Can FCAC award compensation for a reverse mortgage complaint?

No. FCAC does not award individual compensation. FCAC investigates regulatory compliance and can impose penalties on the institution. For individual compensation, you need to go through the ECB (OBSI or ADRBO), which can recommend compensation up to $350,000, or pursue legal action through the courts.

What if my complaint is about the mortgage broker, not the lender?

If your issue is with the broker's conduct (such as failure to disclose, unsuitable recommendations, or misleading information), file a complaint with FSRAO rather than FCAC. FSRAO regulates mortgage brokers in Ontario and has the authority to investigate, impose fines, and revoke licenses.

Can I file a complaint if my reverse mortgage was signed years ago?

Yes, there is no strict time limit for filing a complaint with the lender or ECB, although acting promptly strengthens your case. For FCAC regulatory complaints, the agency can investigate issues regardless of when the mortgage was signed, though older complaints may be more difficult to investigate due to document retention policies.

Will filing a complaint affect my reverse mortgage?

Filing a complaint should not affect the terms of your existing reverse mortgage. Lenders are prohibited from retaliating against borrowers who file legitimate complaints. If you experience any negative consequences after filing, document them and include them in your complaint — retaliation is itself a regulatory violation.

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Knowing how to navigate the complaint process gives you a powerful tool for accountability. You do not need to accept poor service or undisclosed terms — the system is designed to protect you.

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