Number of banking complaints the highest in 5 years: watchdog

Complaints about Canada’s big banks rose in 2017, according to figures released Thursday by the country ’s primary financial services industry ombudsman.

The Ombudsman for Banking Services and Investments — a national, not-for-profit organization to which consumers can turn to settle disputes with OBSI’s participating financial institutions — said in its annual report that it had 5,477 inquiries and opened 721 investigations in 2017, increases of eight per cent and 13 per cent, respectively, over 2016.

Banks were the chief cause of the rise in investigations, OBSI said. There was a 28-per-cent increase in bank-related complaints last year as compared to 2016, the report said, with 370 banking cases opened in 2017.

“In 2017, the number of banking-related cases was the highest they have been in the past five years,” said the ombudsman’s annual report, released on Thursday. It attributed the trend in part to a rise in consumer awareness, efforts by banks to tell them about complainthandling processes, and OBSI as an option to resolve their disputes.

OBSI said that the banking product with the most complaints last year was credit cards. According to the annual report, 30 per cent of all banking cases were related to credit cards, followed by mortgages at 18 per cent and issues with personal accounts at 16 per cent.

“Chargebacks replaced fraud as the leading credit card issue,” said the OBSI annual report. “Prepayment penalties and information that is wrong/incomplete continue to be the top issues with mortgage products.”

Overall, the top banking issue the ombudsman dealt with was fraud, comprising 11 per cent of banking-related cases. That was followed by concerns around unauthorized transactions at eight per cent.

OBSI is mostly funded by its participating firms, and can make non-binding recommendations.

Complaints are only addressed by OBSI once they have passed through a bank’s internal dispute resolution mechanism and internal ombudsman’s office.

The Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Bank of Montreal, among the largest of the approximately 1,400 financial institutions monitored by OBSI, had the most complaints.

Royal Bank of Canada and Tor onto-Dominion Bank opted out of OBSI’s oversight, turning to another dispute-resolution group that is focused solely on banking.

That group, the ADR Chambers Banking Ombuds Office, said in its 2017 annual report that it had 275 new complaints last year, which was up 22 per cent from 2016.

National Bank of Canada is now working with the ADRBO for banking-related complaints as well.