The volume of complaints filed against investment services firms and banks rose in 2016, according to the latest annual report from the Ombudsman for Banking Services and Investment (OBSI), which was released on Thursday.
Specifically, the ombudservice's annual report reveals that the total number of cases it opened in 2016 jumped to 640 from 571 in 2015, marking a 12% increase, with 52% of the complaints coming from Ontario, followed by British Columbia, which made up 15% of the complaints filed.
"While complaint volumes increased year-over-year, overall trends remained consistent," says Sarah Bradley, OBSI's ombudsman and CEO, in a statement. "We are seeing the same kinds of products and issues, and geographic distribution, as in recent years."
The number of cases OBSI opened against investment firms rose by 17% from 2015 to 350, with complaints concerning mutual funds representing 44% of cases last year. The main points of contention were tied to suitability, the suitability of margin or leverage and disclosure.
Suitability-related concerns for common shares, which made up 34% of the investment cases, also were a major issue for consumers.
In the cases involving investment services, OBSI recommended that a total of almost $2.4 million be awarded to those whose complaints warranted monetary compensation, averaging $15,552 per complainant.
The report also notes that the number of cases closed against investment firms dipped by 13% because OBSI directed its resources toward eliminating its case backlog from 2015.
Meanwhile, the number of cases OBSI opened against the banks rose by 6% year-over-year to 290, with mortgage products and related fees and penalties remaining the top grievances among Canadians, OBSI's report suggests.
For example, 24% of cases logged were tied to mortgages — although this figure dipped slightly from 27% last year. Issues concerning personal transactions accounted for 20% of complaints against the banks.
Although OBSI found itself processing more complaints against banks this year, the report says that the number of banking cases resolved increased by about 32%.
On average, OBSI has 10 days to assess if a probe into the complaint against the banks falls within its mandate, after which, it typically takes 57 days to finish its investigation.
OBSI then has about 120 days — from the time it launches its investigation and collects necessary information — to issue a written recommendation to the institutions involved.
In terms of monetary compensation, OBSI recommended that, for cases involving banking complaints, an average amount of $4,016 be paid to the aggrieved party. In 2016, the OBSI recommended that a total of $281,106 needed to be paid.
Last year was a strong showing for the OBSI's performance, the report notes. Among the complainants surveyed whose cases were resolved, 71% expressed satisfaction with the quality of OBSI's service. Furthermore, 83% of those who filed a complaint also rated the quality of OBSI's service as being "very good" or "good."
The ombudservice counts that an estimated 1,400 financial services institutions and firms have opted to participate in its dispute-resolution process.
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