On October 30, 2017, Ombudsman for Banking Services and Investments released its first quarterly OBSI e-news publication, highlighting key statistics for the first three quarters of 2017 as well as observed trends. Overall, the release highlights that complaint volumes were up over the first three quarters of 2017, as compared to the same period last year.
OBSI acts as an independent and impartial dispute resolution provider for banking services and investment firms and their customers, free of charge, and can recommend compensation in disputes up to a $350,000 cap. Banks and investment firms that refuse to comply with OBSI recommendations are subject to a “name and shame” protocol, where OBSI makes public the names of firms that refuse a recommendation. Sarah P. Bradley, Ombudsman and Chief Executive Officer at OBSI, recently noted that in its 20 year-history of working with Canadian consumers to resolve disputes and get compensation from their banks and investment firms, no bank has ever refused to comply with an OBSI recommendation.
In its recent e-publication, OBSI reports that it opened 547 cases for the first three quarters, as compared to 493 cases in the same period in 2016, an 11% increase. Banking cases were up 30%, with 285 cases opened, compared to 219 in 2016, and investment cases down by 4.5%, with 262 cases opened versus 274 the previous year. The e-publication also provides information regarding the number of cases opened relating to the Top 5 Investment Products and Issues, and the Top 5 Banking Products and Issues. Cases related to mutual funds suitability and mutual funds suitability of margin/leverage were down from the same period last year, and cases related to credit card chargebacks and credit card fraud are on the rise.
The e-publication also provides an update on OBSI’s progress regarding managing case delays in the wake of an independent review performed last year, which recommended that OBSI adopt more proactive strategies relating to delays. Among other processes and changes, OBSI has created a dashboard in their case management system to track delays, and reports that it has already seen tangible improvements in the average number of delay days per case – reduced by roughly 50% since 2016.
While OBSI does not have the power to require financial institutions to adhere to its recommendations, a negative determination can have significant reputational consequences. That said, OBSI has struggled over the years as certain financial institutions have withdrawn from their system in favour of alternative approaches, despite express support from securities regulators across the CSA. The Ombudsman has made significant efforts to better align itself with the expectations of investors and consumers, on the one hand, and the financial institutions that are within its purview.