The banking and investment industry set a dubious record in 2010, as review by the Ombudsman for Banking Services and Investments topped 1,000 for the first time its OBSI’s 15-year history.
“The fact that complaints have reached another new high demonstrates yet again that financial sector consumers need and deserve an impartial and effective alternative to the courts to consider complaints they have not been able to resolve with their firm,” said Ombudsman Doug Melville. “This is good public policy, and also good business.”
In total, OBSI opened 1,024 client complaints last year, representing a growth rate of 3.4% year over year. That’s good news, according to the Ombudsman, as the growth rate is slowing. In 2009, market havoc resulted in a 48% increase in cases.
Banking complaints rose by 18.2% to 462 cases, while the number of investment cases declined by 6.2% to 562.
Complaints involving investments were more successful, resulting in compensation 38% of the time, while banking complaints succeeded 20% of the time. Overall compensation received totaled $3,788,896.
The most common grounds for complaints were investment suitability, mortgage prepayment penalties, service issues and credit and debit card fraud.
The full 2010 Annual Report can be found on OBSI’s website.