Blogs & Comment

Big jump in financial complaints

The 2009 Annual Report of the Ombudsman for Banking Services and Investments (OBSI) just came out and it reports a staggering jump in complaintsabout services provided by banking and investment firms. In 2009, OBSI reviewed more complaints than ever before in its history, writes Ombudsman Douglas Melville.
Complaints were up 48% over 2008. Breaking out the complaints, there was a 21% increase relating to banking services and a 73% increase relating to investment services. OBSI attributes the increases to sharp declines in the stock market and greater awareness of the OBSI as a complaint-resolution forum (thanks largely to referrals from regulators and financial firms).
OSBI closed 787 files in 2009. Of these, OBSI recommendedcompensation for 222 (all accepted). Seven files were withdrawn by clients and the rest were upheld in favour of the firm. The most common complaints involved:
increased interest rates on lines of credit failure to fulfill know your client obligation failure to properly disclose risks in complex investment products margin calls and transaction errors from discount brokers surprise over the size of mortgage prepayment penalties surprise over deferred sales charges on mutual funds
Hat tip to Ken Kivenko