OBSI Board of Directors Statement Concerning Ombudsman Services for Canadian Banking Consumers
When Canadians have disputes they are not able to resolve with their banks, they depend on access to an impartial, transparent and public-service focussed ombudsman they can trust to help them understand their situation and try to find a fair resolution to their problem. However, the current system to provide access to justice for these Canadians permits banks to choose between dispute resolution service providers to investigate and decide on its customers’ complaints while the customers have no choice.
Recently, a fourth major Canadian bank has chosen to stop offering OBSI’s services to its clients and move to a private, for-profit service instead. That means that as of November 1, 70% of Canadians will not have access to a not-for-profit, public-service oriented ombudsman to help them when they have a problem with their banks they can’t solve for themselves.
Canada has a strong banking system, one that is founded on principles of trust and fairness. A just and effective complaint handling system is essential to maintain that trust when a consumer feels they have been wronged or treated unfairly or just needs impartial information about their rights and obligations. OBSI has been providing these services to Canadians for over 20 years.
Since 2008, the Canadian government has allowed a system where a bank can select its own external ombudsman, including for-profit options. This policy of allowing banks to choose creates conflicts of interest because it puts the dispute resolution services in the position of having to compete for banks’ business. It also exacerbates the already significant imbalance of power, resources and information that exists between consumers and banks.
OBSI works diligently to provide excellent services to Canadian banks and their customers, and we are encouraged to have the support of all major consumer organizations in Canada, including CARP, the Public Interest Advocacy Center, the Canadian Foundation for the Advancement of Investor Rights, the Consumers Council of Canada, and others.
OBSI’s Board of Directors is calling on the Canadian government to change this policy of letting banks choose their external ombudsman. We believe that Canada’s banking industry and banking consumers would benefit from access to a single, not-for-profit banking ombudsman dedicated to accessibility, openness, transparency, independence, fairness, and efficiency for consumers and firms – and that the government of Canada should establish such a system.
OBSI’s Board has been consistent in this position because it makes the most sense for Canadian consumers and for the financial system as a whole. There are good reasons why a single ombudsman for financial services complaints is the recognized best standard of other leading countries with progressive financial sectors, such as the United Kingdom, Ireland and Australia.
There is good reason why here in Canada, for almost 20 years, we have had a single ombudsman system for the investments industry to ensure people have a truly fair and independent process to settle disputes, and to give the industry a clear point of contact and a level playing field. That ombudsman is OBSI.
The Canadian government is aware of this issue, and we would encourage Canadians to contact their Members of Parliament to share their concerns about the current system that is unfair to consumers. A single, independent, not-for-profit ombudsman dedicated to providing fair, efficient and balanced dispute resolution for financial firms and their customers is in the public interest.
James Emmerton
Chair, OBSI Board of Directors
November 20, 2018