Extraordinary Distress and Inconvenience

OBSI’s approach to compensation for extraordinary distress and inconvenience

At OBSI, our recommendations are focused on putting the consumer in the position they would have been in had a firm’s mistake not occurred. This can include:

calculating the financial harm that a consumer has incurred
recommending that a firm take corrective action
recommending compensation for extraordinary distress or inconvenience (EDI)

OBSI’s Terms of Reference allow us to recommend compensation for both monetary and non-monetary harms as appropriate. Recommendations for compensation for EDI acknowledge an extremely bad experience caused by a firm’s error or conduct. This document outlines our approach to recommending compensation for EDI.

What is considered extraordinary distress and inconvenience?

At OBSI, we understand that people naturally feel stressed when something goes wrong with their financial services provider. All firm mistakes and all consumer complaints involve some degree of distress and inconvenience for the consumer. This is a normal part of the complaint experience and we generally do not recommend compensation for it. However, when a firm’s error or conduct causes significantly more distress and inconvenience than is reasonable, we may recommend compensation for EDI in addition to any direct financial harm that the consumer may have experienced. EDI is sometimes referred to as “non-financial harm” or “non-monetary loss”.

Examples of situations where we might recommend compensation for EDI include:

very poor customer service, including poor complaint-handling
a privacy breach
discrimination
unreasonable delays in addressing a problem
mistakes and errors that impact the consumer unnecessarily

Recommendations for EDI are independent of recommendations for financial harm or corrective action, though all three types of recommendation may be made in the same case.

When will OBSI recommend compensation for extraordinary distress and inconvenience?

For OBSI to recommend compensation for EDI, we consider whether: 

the firm failed to meet an obligation or provided poor customer service, and
its conduct caused the consumer distress and inconvenience that was objectively unreasonable or extraordinary

Did the firm fail to meet an obligation or provide poor customer service?

Financial services firms must fulfill obligations to their customers, regulators and others. For example, securities regulations require that an investment firm act fairly, honestly and in good faith. Banks operating under the Bank Act have committed to following a number of guidelines, such as the Code of Conduct for the Delivery of Banking Services to Seniors. Where a firm has failed to meet its obligations, causing a consumer extraordinary distress and inconvenience, we may recommend compensation.

Similarly, firms are also required to provide a basic level of service to their customers. In most cases, for a simple mistake that the firm has fixed within a reasonable amount of time or apologized for, we would not recommend compensation for EDI. People make mistakes and should be allowed to rectify them. However, where the firm’s level of service has fallen below the basic standard, for example by not fixing an error or making the situation worse with delays or additional errors, causing a consumer extraordinary distress and inconvenience, we may recommend compensation.

Did the firm’s conduct cause the consumer distress and inconvenience that was objectively unreasonable or extraordinary?

For OBSI to consider recommending compensation, the firm must have caused the consumer to experience distress and inconvenience which is far more than would be reasonably expected in the situation. This applies even if the consumer did not suffer financial harm or if we are not recommending compensation for financial harm or corrective action.

We determine if a consumer has experienced EDI by comparing the consumer’s experience to what a reasonable person would feel in the same situation. While we consider relevant personal aspects of the consumer’s life, we generally do not take into account their unique or individual response to the situation. For this reason, we do not investigate or recommend compensation for health-related issues, such as anxiety, lack of sleep or other medical concerns.

However, we may recommend compensation if the firm’s mistake is objectively worse than normal in the circumstances. For example, if the firm made an error with an account during a marital breakdown or with an estate account while the consumer is grieving, we may consider these situations to be objectively emotionally charged and challenging and expect the firm to act with extra care.