- Ombudsman for Banking Services and Investments
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Ombudsman for Banking Services and Investments (OBSI) is a Canadian organization whose responsibility is to handle the financial disputes of consumers and small businesses that could not be resolved by the customers and the financial firms on their own. The OBSI provides the service on an impartial and independent basis, and free of charge to the consumer as an alternative to the legal system.
OBSI is Canada's national independent dispute resolution service (ADR) for consumers or small businesses with a complaint they can't resolve with their financial services firm. As a free alternative to the legal system, OBSI works informally and confidentially to find fair outcomes to disputes about banking and investment products and services.
If OBSI decides that a firm has acted unfairly, made an error or given a customer bad advice, and the customer lost money as a result, it will recommend that the firm restore your financial position to where it should have been. OBSI may also recommend other types of non-financial compensation when appropriate. If OBSI thinks a customer has been treated fairly, or the settlement offer the customer has previously received from a firm is fair, OBSI will inform the customer and let them know the reasons why it believes so. While OBSI cannot order a firm to follow a recommendation, OBSI has an excellent record of firms – and clients – accepting its recommendations. OBSI will make public the name of any firm that refuses a recommendation.
The limit for OBSI’s recommendations is $350,000. However, if a customer’s claim is for an amount higher than $350,000 the customer can voluntarily reduce it.
OBSI is not a regulator, and because OBSI is impartial they don’t advocate for consumers or the industry. That also means OBSI doesn’t give advice – financial, legal or other. If a customer doesn’t like OBSI’s findings in a case, the customer is still able to go to a lawyer or seek other ways of resolving the dispute.
Contents
History
OBSI was founded in 1996 as the Canadian Banking Ombudsman to review complaints by small business against the chartered banks. In a few short months the mandate was expanded to cover unresolved consumer complaints as well.
In 2002, as a result of discussions among government, industry and consumer groups about improving consumer protection in financial services, the investment industry and other firms under federal financial services laws joined. At the same time OBSI invited credit unions to join and changed its name to "Ombudsman for Banking Services and Investments" (OBSI).
Today OBSI has more than 600 participating firms across the banking services and investment sectors. Any regulated firm in the banking services and investment fields is eligible to join OBSI.
Complaints that OBSI deals with
OBSI looks into complaints about most banking and investment matters including:
- Debit and credit cards
- Mortgages
- Stocks, mutual funds, income trusts, bonds and GICs
- Loans and credit
- Investment advice
- Fees and rates
- Transaction errors
- Misrepresentation
- Accounts sent to collections
OBSI is able to make recommendations for amounts up to $350,000.
OBSI has more than 600 participating firms in Canada, including:
- Banks, domestic and foreign owned
- Credit Unions
- Federal trust and loan companies and other deposit taking organizations
- All Investment Industry Regulatory Organization of Canada (IIROC) member firms
- All Mutual Fund Dealers Association of Canada (MFDA) member firms
- RESP Dealers Association of Canada (RESPDAC) member firms
A full list of firms that participate in OBSI can be found at www.obsi.ca.
Complaints that OBSI won't deal with
If the customer’s complaint involves an insurance company, the customer should contact one of the insurance ombudservices to see if they can help. The OmbudService for Life and Health Insurance (OLHI) deals with concerns about life and health insurance, including disability, while the General Insurance Ombudservice (GIO) covers issues of car, property and business insurance.
Along with OBSI, the insurance services are part of the Financial Services OmbudsNetwork, a network of dispute resolution services working to resolve complaints fairly and impartially.
OBSI won’t take on a complaint if:
- The customer or the firm has started a court action or arbitration process
- The firm responded to customer’s complaint, and the customer did not bring it to OBSI on a timely basis
- The customer has already settled the complaint by accepting an offer from the firm
- It’s about a general commercial decision of the firm, such as an interest rate or a credit decision
Governance
OBSI's governance structure is designed to ensure the Ombudsman and staff are independent and impartial, and have the necessary resources to carry out their jobs.
A non-profit and independent organization, OBSI is overseen by a Board of Directors. A majority of the directors are independent, and have not been part of industry or government for at least five years. A minority of the directors are appointed by industry bodies. The directors also comprise the voting membership of the organization.
Beyond the composition of the Board, further important safeguards of OBSI’s independence are in place. In addition to having at least a two-thirds majority on the board, the Independent Directors control the hiring and firing of the Ombudsman, the budget process, the Terms of Reference and the nomination of Independent Directors.
OBSI is headed by the Ombudsman has two teams of investigators: one for Banking Services and the other for Investments. The Ombudsman is also independent of industry and government.
Funding
OBSI levies fees on all of participating firms based on their size or volume of business. OBSI’s budget is set each year by the Board of Directors based on the advice of staff.
International Network of Financial Services Ombudsman Schemes
OBSI is a member of the International Network of Financial Services Ombudsman Schemes, a global association whose members operate as out-of-court dispute resolution mechanisms in the financial sector.
Other members include:
- Financial Ombudsman Service (Australia)
- Financial Services Ombudsman's Bureau of Ireland
- Ombudsman for Banking Services (South Africa)
- Financial Ombudsman Service (United Kingdom)
A list of all members can be found at the International Network's website.
2009 highlights
From OBSI's 2009 Annual Report:
- Opened 990 case files, a 48% increase from 2008 (670)
- Over 200% increase (a tripling) in total case files opened over the previous three years
- 391 banking case files opened, 21% increase over 2008 (324)
- 599 investment case files opened, 73% increase over 2008 (346)
- 84% of case files completed in less than 180 days
- Over 12,400 inquiries by telephone, email and other sources
- Consumers received compensation in 28% of cases reviewed by OBSI (222 out of 787 case files closed)
References
Investment Industry Regulatory Organization of Canada How to get the money back
Toronto Star Complaints about banks, investment dealers at record high: Ombudsman
Canoe.ca Banking Ombudsman probes record complaints in 2009
Advisor.ca When selling DSC funds, err on the side of disclosure
Chinese News Unsuitable advice leads to compensating clients,OBSI
Lethbridge Herald There is an avenue for consumers with investment complaints
The Globe and Mail Banking watchdog to track dementia-related cases
Canadian Press Rise seen in financial abuse of the elderlyExternal links
Categories:- Conflict process
- Dispute resolution
- Organizations based in Canada
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