TORONTO, Feb. 16, 2022 /CNW/ - The Ombudsman for Banking Services and Investments (OBSI) has released its year-end complaint volume figures for 2021.
During the year, case volumes reached an all-time high, notably surpassing the previous record set in the aftermath of the global financial crisis. In 2021, OBSI opened a total of 1,082 cases compared to 791 cases in 2020, representing a 37% year-over-year increase. The rise in total case volumes was predominately led by a 55% year-over-year increase in banking service-related cases, which increased from 332 to 514. Investment-related cases rose by 24%, from 459 to 568, when compared to 2020.
"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. Throughout this difficult period, OBSI has been called on to serve more consumers than ever before, reinforcing the importance of fair, effective and trusted ombudservices, especially during periods of economic uncertainty," said Sarah Bradley, Ombudsman and CEO, OBSI. "OBSI remains a committed provider of an important public service and focused on keeping pace with this ever-growing need."
Investment case volumes driven largely by DIY investing complaints
Among investment products, complaints related to common shares became the leading investor concern with a 59% year-over-year increase. This was largely influenced by rising cases related to do-it-yourself (DIY) investor platforms. Scholarship trust plans also saw a large jump in year over year case volumes.
Case volumes relating to service issues saw a 38% year-over-year increase and replaced suitability as the most commonly complained-of issue. This trend was driven by investors who encountered challenges with DIY investing platforms which surged in popularity during the pandemic. Service issues have not eclipsed issues related to suitability since 2004. Complaints involving transaction errors and complaints involving fee disclosure also increased sharply, more than doubling in volume.
Banking case volumes led by credit card and fraud complaints
Banking cases climbed significantly across all product categories, with credit card complaints leading the sector's overall case volumes with a 46% year-over-year increase. Contributing to this trend were personal transaction complaints, which rose by 20% compared to 2020 and complaints related to mortgage loans slightly more than doubled. Other products also saw significant increases over 2020 levels: wire transfer complaints were more than double and e-transfer complaints were five times higher. Both e-transfer and wire transfer complaints also increased significantly during the year, largely influenced by cases of fraud.
Fraud continued to be the most complained-of issue for bank consumers for another consecutive year, increasing 47% year-over-year. Service issues were the second most common complaint, rising 75% year over year. The other notable increases were seen in relation to chargebacks, which more than doubled and relationship-ended cases that rose by 80%.
"At OBSI, we believe that fair and effective ombudsman services are a critical part of maintaining a prosperous and healthy financial services sector," said Ms. Bradley. "When consumers and firms know they have a trusted place to turn when disputes arise, they can do business with greater confidence."
For more information, OBSI's 2021 annual data can be found here. Complaints data is also made available each quarter here.
Canada's Ombudsman for Banking Services and Investments (OBSI) is a national, independent and not-for-profit organization that helps resolve and reduce disputes between consumers and financial services firms in both official languages. OBSI is responsive to consumer inquiries, conducts fair and accessible investigations of unresolved disputes, and shares its knowledge and expertise with the stakeholders and the public. If a consumer has a complaint against an OBSI participating bank or investment firm that they are not able to resolve with the bank or firm, OBSI will investigate at no cost to the consumer. Where a complaint has merit, OBSI may recommend compensation up to a maximum of $350,000.
SOURCE Ombudsman for Banking Services and Investments (OBSI)
Mark Wright, Director, Communications and Stakeholder Relations, 416-287-2877 ext.2225, [email protected]
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