The Ombudsman for Banking Services and Investments (OBSI) has released its annual report for 2017, which highlighted a significant increase in the number of cases investigated.
"In 2017, there was a 13 per cent increase in the number of cases OBSI investigated. We opened 721 investigations, up from 640 in 2016, largely due to an increase in banking case volumes," said Ombudsman and CEO, Sarah Bradley in a March 15 announcement. "There were 370 banking cases opened in 2017, a 28 per cent increase compared to last year, while the number of opened investment cases remained flat at 351 cases."
OBSI received 5,477 total inquiries in 2017, an increase of eight per cent from 2016. The total compensation recommended was $2,591,996.
Credit card complaints almost doubled
In 2017, the most commonly complained about banking products were credit cards, mortgages and personal accounts. OBSI says credit card complaints almost doubled in 2017 from the previous year, up from 17 per cent to 30 per cent of cases.
“Credit card complaints have now replaced mortgage complaints as the leading issue for bank complaints. Problems with chargebacks were the main issue consumers complained about, and chargebacks have now replaced fraud as the leading problem people reported with their credit cards,” says OBSI.
Mortgage prepayment penalties
Mortgages were the subject of 18 per cent of banking cases in 2017, the second most-complained about product. Prepayment penalties and wrong or incomplete information continued to be the top issues complained about with respect to mortgages.
Complaints about personal accounts made up 16 per cent of banking cases in 2016, with the most frequent issue being a bank's decision to end the client relationship.
Common shares (or equities) were the number one investment product that consumers complained about in 2017, representing 38 per cent of all investment complaints in 2017. This is an increase from 34 per cent in 2016.
Mutual funds accounted for 35 per cent of cases and scholarship trust plans represented 9 per cent of complaints.
“The issue most frequently complained about in investment cases was the suitability of the investment at 27 per cent…Fee disclosure was the next most frequent issue at 17 per cent, up significantly from 10 per cent of cases in 2016, and it was the leading issue related to mutual fund complaints,” says OBSI.
Complaints about suitability of margin or leverage, dropped to 9 per cent of cases from 15 per cent in 2016. Incomplete or inaccurate disclosure about a product declined to 9 per cent of investment cases, down slightly from 11 per cent the previous year.
To learn more, consult the 2017 Annual Report on OBSI’s website.