Older Canadians experience different challenges with financial services than younger Canadians, observes the Ombudsman for Banking Services and Investments’ (OBSI), which released its first ever report on seniors’ complaints July 18.
OBSI collected demographic and case data for 2017 and 2018 to create the report, which used the age of 60 as the threshold age of a senior. The study showed that 38% of complaints to OBSI came from people over the age of 60.
Fraud is the most frequently reported banking issue among seniors, says the report. Credit cards are the banking product that OBSI received the most complaints about from seniors and “credit card chargebacks are the most complained about combination of bank product and issue.” For seniors over 70, missing or lost funds were also a leading source of complaints, says OBSI.
Suitability of investments
The report showed that older Canadians are more likely than younger Canadians to file complaints relating to investment issues. “Seniors' investment-related complaints related predominantly to mutual funds and common shares, and their complaints mostly focus on the advice that they received when making these investments. The suitability of common shares and mutual funds, as well as fee disclosure, were the most complained about combination of investment products and issues,” noted OBSI.
Barriers to financial services
Some of the challenges faced by seniors identified in the report include: barriers to effective access to financial services, including information barriers, emotional and social barriers, physical barriers, and economic barriers that affect seniors to a greater extent than younger Canadians.
Communication challenges are another barrier. “Seniors often report being overwhelmed by lengthy disclosure documents that contain too much information and require extended periods of attention and focus,” says OBSI.
Technology was another problematic issue. “Technology offers some innovative solutions for the challenges seniors face, but in general they are less likely to take advantage of newer technologies,” says OBSI, adding that “even seniors who are comfortable with technologies, such as online banking, are nevertheless more vulnerable than younger clients because they may not be as aware of the security measures they need to protect their interests.”
The report also highlights a number of solutions that financial services providers and regulators could consider to reduce the challenges faced by seniors, such as encouraging financial service providers to identify and use "trusted person" procedures; providing protection for providers of financial services who take action in what they reasonably believe to be the best interests of the consumer and ensuring that employees of financial services firms have the right incentives to provide appropriate services to seniors.
To learn more, consult the Seniors Report on OBSI’s website by clicking here.