It’s time to walk the talk on beefing up financial industry dispute resolution, says a collection of consumer and investor advocacy groups.
Speaking on behalf of a coalition of advocates, FAIR Canada called on policy-makers, both governments and regulators, to strengthen complaint handling and dispute resolution in the financial sector.
Last year in the wake of a review of the current system for resolving consumers’ complaints in the banking industry, the federal government called for the creation of a single ombudservice with binding authority, the groups noted.
And earlier this month, the Canadian Securities Administrators (CSA) said they’re working on a proposal to introduce binding authority for investment complaints at the Ombudsman for Banking Services and Investments (OBSI).
Now, consumer groups — including CARP, CanAge, Prosper Canada, Option consommateurs, the Public Interest Advocacy Centre, Kenmar Associates and CFA Societies Canada — are calling on policy-makers to follow through on those pledges.
“We fully support binding decisions and, given OBSI’s long track record of serving the public interest, it should be selected as the sole complaint-handling service for banking and investment complaints,” said Jean-Paul Bureaud, executive director of FAIR Canada, in a release.
“It’s time for governments and regulators to act on these recommendations and address the serious shortcomings in the current system,” he said.
Among other things, FAIR said introducing binding authority at OBSI will help combat the issue of harmed investors accepting low-ball settlement offers, for fear of being left with nothing, given that OBSI has no real way to enforce its compensation recommendations.
“We’re pleased that the CSA will finally be publishing a proposal next year,” Bureaud said. “But this issue has dragged on for too many years and concrete action is urgently required.”
Bureaud called on the federal government to take action to address the issue of competition between external complaint bodies — OBSI and ADR Chambers Banking Ombudsman Office — in the banking sector.
FAIR noted that an independent review by professor Poonam Puri that was released earlier this year found that “having two different bodies handle banking complaints … creates inefficiencies and increases complexities.”
And “allowing banks to choose their external ombudsman negatively affects customers’ perceptions of the system’s fairness,” it said.
OBSI is the “obvious choice” to serve as the single ombudservice with binding authority, Bureaud said.
“We should not entertain further delays in making the complaint system fair for consumers,” he said.