Two business men shouting through megaphones

The Ombudsman for Banking Services and Investments (OBSI) upheld 39% of investment complaints in 2017 and ordered $2.4 million in total compensation to wronged investors, according to the dispute resolutions service’s latest annual report.

OBSI’s caseload increased last year, although most of this was due to a rise in complaints involving banks and credit unions (up 28% year over year).

The volume of investment industry complaints was more or less flat compared with 2016.

In terms of compensation recommendations, OBSI upheld 39% of investment complaints in 2017 and 23% of banking complaints.

In total, this amounted to almost $2.6 million in recommended compensation, with the vast majority of this, $2.4 million, on the investment side.

Average compensation for investors rose to $16,180 from $15,552 in 2016, but this remains low compared with the past few years.

No firms refused OBSI recommendations in 2017.

Additionally, OBSI recommended non-monetary compensation (such as firms issuing apologies, or repairing a client’s credit rating) in a handful of cases.

Suitability issues continue to be the top source of investment complaints, accounting for 27% of complaints; this is unchanged from 2016. Fee disclosure disputes ranked next, accounting for 17% of complaints, up from 10% in 2016. Fee disputes were the main source of complaints involving mutual funds, the OBSI report says.

Leverage suitability and product disclosure disputes tied for third place, representing 9% of investment complaints, down from 15% and 11%, respectively, in 2016.

Complaints that involve Investment Industry Regulatory Organization of Canada (IIROC) firms accounted for 182 new cases in 2017, compared with 103 new cases from firms that belong to the Mutual Fund Dealers Association of Canada (MFDA).

For IIROC firms, OBSI resolved 207 cases, and recommend client compensation in 91 cases. It resolved 104 cases for MFDA firms, and upheld client complaints in 38 of those cases.

On the banking side, complaints about credit cards jumped to 30% in 2017 from 17% in 2016, taking over from mortgages as the banking product generating the most complaints.

Two industry sectors that were recently added to OBSI’s mandate — portfolio managers and exempt market dealers (EMDs)— accounted for a small part of the service’s workload.

Each sector only produced 18 new cases, with just one complaint involving an EMD being upheld, and three complaints involving portfolio managers upheld.

Conversely, disputes involving scholarship plan dealers generated 30 new cases, and OBSI upheld client complaints in 13 of the 35 cases that it resolved during the year.

Looking ahead to 2018, OBSI aims to continue to reduce the time it takes to resolve complaints, in part through the introduction of a new process for dispensing with simple cases more quickly, according to the report.

“This was a very successful year for OBSI, in which we launched our new five-year strategic plan and made significant progress towards the accomplishment of our key objectives,” says Ombudsman and CEO, Sarah Bradley, in a statement.

“We increased our organizational transparency, accessibility and awareness, while focusing on managing our enterprise risk and efficiently and effectively resolving disputes for Canadian consumers,” continues Bradely.

“We also made some significant investments in our essential infrastructure this year, including improvements to our case management systems to allow faster and more accurate reporting, and a complete redesign of our website to give Canadian consumers and firms better access to information about us, our service and our insights,” she adds.