Last year was a little bit easier for the Ombudsman for Banking Services and Investments, with the number of opened cases falling to the lowest since 2008. It’s likely a welcome change, as the Ombudsman was swamped with complaints in 2010.

The Ombudsman’s office opened a total of 802 cases in 2011, including 397 related to banking, 255 related to IIROC-member firms and 130 MFDA-member firms. The remaining 20 cases involved RESP dealers and “other” investment dealers.

Among banks, TD was on the receiving end of the most complaints (131), followed by Scotia (72) and CIBC (65). Among Investment cases opened, TD was again at the top of the table, with 59 cases, followed by RBC (34) and Investors Group (32).

The high number of complaints may have played a role in TD’s decision to drop out of the voluntary OBSI system In October 2011. This affected only the banking arms of the overall company, TD Bank and TD Canada Trust, and not its various investments divisions.

Read Board: Force banks to use OBSI

TD is the second Canadian bank to withdraw from OBSI, following RBC’s withdrawal in 2008.


OBSI received 397 banking-related complaints in 2011, a decline of 14% from 2010.

“Service issues and fraud continued to be the largest contributors to the issues we addressed,” said Tom Goodbody, deputy ombudsman for banking services. “The areas where we saw the greatest breakdowns in service were in transaction accounts, mortgages, credit and debit cards and loans.”

He says that while customers have an obligation to read and understand product documentation provided, the banks must ensure to the best of their ability that the customer understands the product and that it meets their needs.

OBSI recommended compensation in 66 banking cases totalling $487,546, ranging from a high of $74,983 to a low of $30. The average compensation amount was $7,387.


“The surge in investment complaints that came in following the market meltdown of 2008-09 finally subsided this year,” Robert Paddick, deputy ombudsman for investments said in his report.

OBSI received 405 investments-related complaints, with Suitability being the most common issue (224 cases), followed by fees (50), transaction errors (41) and misrepresentation (40).

OBSI recommended compensation totalling $2,691,721 in 167 investments cases, ranging from a high of $220,000 to a low of $154. The average compensation amount was $16,118.

Who’s filing complaints?

OBSI has compiled demographic data on those who filed complaints, including information on age, ethnicity, education, occupation and income.

Over 75% of complaints were filed by people over the age of 50. A slim majority (53%) of OBSI clients were over the age of 60. Of those over the age of 60, 70% were retired and retirees made up 40% of all complaints.

Read: Why older clients complain

“For many of these individuals, the financial harm they suffer when a bank or investment firm makes a mistake is magnified by having fewer years to make up the losses,” the report points out. This make the ombudsman’s role even more important, as an OBSI complaint is both cheaper and faster to resolve than legal action.

“We are seeing more cases of elder financial abuse and in view of the country’s demographics this is likely to grow in the coming years,” says Goodbody. “Where an elderly person is adding a family member or friend to their account(s) or signing a power of attorney, the bank’s role has become increasingly difficult yet nonetheless important.”

The demographic survey also found that almost 80% of OBSI complainants had some form of post-secondary education, compared to just 52% of the overall population. This makes sense, however, since the general population data includes every Canadian over the age of 15, and few 15- to 20-year olds have higher education.

University graduates made up the largest segment of complainants, at 42.7%, followed by those with a college, CEGEP, or other non-university diploma (26.2%).

The higher education level of complainants also makes sense, given that people with higher education also tend to be more highly engaged with the financial services industry, and are more likely to know their rights when they feel they have been wronged.

OBSI also found that visible minorities were under-represented among complainants; while 16.2% of Canadians identify themselves as a visible minority, only 11.6% of OBSI complainants did so.

“While cultural factors may play a role, more research is needed into why we are still not reaching this important segment of Canadians in the way we should be,” the report says. “While we already handle inquiries in over 170 languages, include information in multiple languages on our website, and engage regularly with several ethnic media outlets, more can and should be done.”

A narrow majority of complaints came from single income households (53.2%). Among single-income households, 62.8% of complaints came from households with an income of less than $60,000. Those earning $60,001 to $80,000 accounted for 15.2% of cases among single income households.

Among the 46.8% of complaints that came from dual-income households, 57.8% of cases involved households with less than $100,000 in income.

A huge majority (83.6%) of complainants owned their home. Just under 19% had children under the age of 18.

The majority of complaints came from Ontario residents (58.2%), followed by Quebec (12.8%) and British Columbia (11.2%).

Read the full OBSI report here.