A trio of consumer advocacy groups are calling on the federal government to appoint a single, non-profit ombudsman for the retail banking sector.
The Canadian Foundation for Advancement of Investor Rights (FAIR Canada), CARP and the Consumers Council of Canada announced Thursday they are initiating a letter-writing campaign to demand that Parliament protect consumers by requiring that banks utilize the same external dispute resolution service.
The current system, which allows banks to select their external complaints body, forces those firms to “compete for banks’ business and puts pressure on them to rule in the banks’ favour, so they will continue to get their business,” the groups say in a news release.
This arrangement is unfair to consumers, they add.
In the investment industry, securities regulators have mandated that all firms under their jurisdiction use the Ombudsman for Banking Services and Investments (OBSI) to resolve disputes with clients.
Marian Passmore, director of policy & COO at FAIR Canada, says that
The federal government should also designate OBSI as the sole ombudsman for banking complaints, says Marian Passmore, director of policy and COO, FAIR Canada.
“The system as it currently stands is deeply unfair because it protects powerful banks over consumer interests,” says Wanda Morris, chief advocacy and engagement officer at CARP. “This effort is to put consumers, especially the vulnerable and older people, on an equal footing with the banks. Each dispute needs to be resolved fairly by a single, non-profit external body that is accountable, independent, transparent, fair, and accessible.”
The government is aware of the issue, the advocacy groups says, but consumers must now advocate for their own interests.
“An ill-conceived policy is eroding the modest existing accountability to consumers for how well dispute resolution in banking functions in the country,” says Don Mercer, president of the Consumers Council of Canada. “Given the recent revelations about banking sector sales practices, this state of affairs has become increasingly outrageous.”