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- Published: 18 November 2020
Guest Post by Anne-Marie Monroe, Advisor, Communications and Stakeholder Relations, OBSI / OSBI
At the Ombudsman for Banking Services and Investments (OBSI), we often hear from consumers who are confused. They need to know how to resolve their financial complaints. For 25 years, we’ve been helping consumers and financial services firms resolve disputes at no cost to consumers. While thousands of consumers from different walks of life and economic circumstances turn to us each year for assistance, older Canadians account for approximately 38% of OBSI complainants.
OBSI is an alternative to legal action that provides access to justice for Canadian consumers who have experienced financial harm during the regular course of doing business with their financial services firm. But not all consumers are seeking a big settlement to resolve their dispute. In many OBSI cases, the financial harm is low in comparison to the cost of legal action. Still, the amounts are meaningful to the consumer.
In 2019, the average amount of compensation we recommended for banking complaints was $2,425. For investment complaints, it was $14,291. For consumers who live in lower- to middle-income households any financial harm of this kind is real and pressing.
This fall, we published a report to explore the role of income level in the financial services experiences of Canadian consumers. For the purposes of the report, we grouped our cases into three income categories:
- lower-income households (under $60,000);
- middle-income households ($60,000 to $100,000); and
- higher-income households (over $100,000).
Our key findings show that nearly 40% of OBSI cases come from lower-income complainants, indicating a great need for our service among lower-income households. The report also found that most consumers who live in lower-income households were over 60, suggesting that older Canadians have a particular need for accessible dispute-resolution services.
The leading banking complaint for lower-income consumers was related to fraud. Lower-income consumers also complained most often about investment suitability. The resources below can help to provide you with a better understanding of these issues.
Protect yourself from fraud
The following tips can help you to avoid scams:
- Protect your personal information and do not share it.
- When you meet someone online, do your research. Often an online search can verify the identity of the person or company you are dealing with.
- Never send money from a bank unless you are 100% sure who you are sending it to.
- If you are ever asked to refund money to someone, be extremely vigilant. It is likely a scam. Never agree to deposit a check and wire transfer money back anyone or forward funds to a third-party.
- Be cautious when dealing with people you have only met online. If you decide to send them money use secure, traceable transactions. Do not send wire transfers, prepaid debit cards or gift cards.
- Be cautious about opening attachments in any format, even via social media or text message. You may be unwittingly allowing a virus to infect your computer or device.
For more information about scams we see most often, go to our Consumer Bulletin here.
Suitability complaints
People often complain to us that they lost money because their investments were not suitable for them and their advisor gave them bad advice. Here are some things for investors to think about:
- Investment suitability is not determined on the basis of losses. Investment suitability is based on the risk profile of an investment at the time that advice about it was given.
- Every investment has the possibility of gains and the risk of loss, and the amount of each is usually closely matched. The advisor’s role is to recommend suitable investments, but they cannot predict the future nor guarantee results.
- Investors should monitor their investments and stay informed by reviewing their account statements regularly. If you are concerned about the performance of your investments, you should contact your investment advisor to discuss the matter.
Read our most recent case study about investment suitability here. OBSI is a financial resource for all Canadian consumers
OBSI is an alternative to legal action and free to consumers. If you have brought a complaint to your financial institution and are unsatisfied with the outcome, contact us. We may be able to help.
OBSI’s Report on Income and Canadian Financial Consumer Complaints is available in both English and French on our website at www.obsi.ca.
Contact Anne-Marie Monroe:
OBSI / OSBI
T: 1.888.451.4519 x 2302
F: 1.888.422.2865
Twitter: @Ombudsman_OBSI