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October 2023 Advocacy Newsletter
Summary:
Strengthening the Ombudsman for Banking Services and Investments (OBSI)’s powers to resolve consumer complaints about the financial sector has been a longstanding priority for our Council.
When we met in Toronto last month, we had a chance to celebrate significant progress on this priority: The federal government had announced it would be establishing OBSI as the sole outside complaint resolution body for the banking sector.
Previously, banks had the option of bypassing OBSI and hiring private firms to hear and adjudicate complaints brought against them. The conflicts of interest this creates are obvious. Reforms to this system represent an important victory for financial consumers.
Now it’s time for the provinces to resolve another longstanding problem, having to do with the securities side of OBSI’s mandate. When retail investors bring complaints to OBSI, the best that organization can do is make recommendations about how these complaints should be resolved. Firms can ignore these recommendations or, as they often do, settle with the investor for a lesser amount.
Why would investors settle? Because the cost of the alternative—pursuing court proceedings—could well dwarf the amount of their claims. It’s time for the provinces to rebalance this lopsided system by making OBSI decisions binding in the securities sector.
Consumers deserve a financial sector that works for them. Having an effective system for resolving complaints is vital to that goal. We applaud the federal government’s progress in this direction and hope this will be followed in short order by provincial action.