Ottawa forcing big banks to use OBSI to resolve customer complaints
The federal government is forcing Canada’s big banks to take unresolved customer complaints to a single independent dispute-resolution body — one that three of the country’s largest financial institutions have stopped using over the years as a result of disagreements over how it dealt with complaints.
The choice of the Ombudsman for Banking Services and Investments (OBSI), announced Oct. 17 by Finance Minister Chrystia Freeland as the sole external complaints body for Canadian banks, was cheered by investor advocates, including FAIR Canada and the Public Interest Advocacy Centre, which noted its established reputation for fairness over the past 25 years.
However, FAIR Canada is pushing for more, urging Ottawa to beef up OBSI’s powers by giving it the ability to make binding rulings in customer disputes. Without binding powers for its decisions, the dispute resolution body can only enforce compensation of up to $350,000 by “naming and shaming” banks that ignore its decisions.
“FAIR Canada and other consumer groups have repeatedly pointed out how Canada’s approach to banking complaints fell short of international standards and best practice,” said Jean-Paul Bureaud, executive director of the investor advocate.
In a news release, the investor advocates said the lack of binding authority for OBSI “means that some investment firms simply ignore its recommendations for resolving investor complaints in a fair and impartial manner.”
“More commonly, it means some investment firms pressure customers to accept less compensation than OBSI considered appropriate for the circumstances,” FAIR said.
Canada’s banks are required to have an outside body adjudicate complaints from customers that the parties are not able to resolve. Prime
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