Fallout from the rise of trading apps is evident in the latest data from the Ombudsman for Banking Services and Investments (OBSI), which saw an increase in complaints involving do-it-yourself (DIY) investors and service.
OBSI reported that overall complaint volumes were up 37% year over year in 2021, led by a 55% jump in complaints involving banks. Investment-related complaints were up 24% from the previous year.
The leading concern for investors involved service issues, with complaints in this area jumping 38% year over year.
“This trend was driven by investors who encountered challenges with DIY investing platforms, which surged in popularity during the pandemic,” OBSI reported in a release, noting that service issues surpassed suitability complaints for the first time since 2004.
On the banking side, service issue complaints were also up 75%, OBSI reported, although these issues ranked second among customers’ concerns, with fraud remaining the most common complaint.
Among investment cases, complaints about transaction errors and fee disclosure failings also “increased sharply, more than doubling in volume” last year, OBSI noted.
Overall, the number of cases opened by OBSI last year reached an all-time high (1,082), overtaking the volume of complaints it received in the wake of the global financial crisis, it said.
“The ongoing pandemic has presented challenges for consumers and financial services firms alike. Despite our collective hope to return to normal life in 2021, unfortunately we instead faced continuing uncertainty and renewed concerns and economic disruptions,” said Sarah Bradley, ombudsman and CEO with OBSI, in a release.
The record rise in caseload at OBSI comes as the organization undergoes its latest independent review, headed by Osgoode Hall Law School professor Poonam Puri. The results of that review are expected by the end of March.