Banking complaints reached new records in 2022: report
Canada’s Ombudsman for Banking Services and Investments (OBSI) says it responded to a file excessive of greater than 10,000 public inquiries in 2022, and the variety of fraud complaints rose dramatically year-over-year.
OBSI is a nationwide and unbiased not-for-profit that offers with disputes between folks and monetary companies. In its 2022 annual report, OBSI recorded a 40 per cent enhance in public inquiries year-over-year. OBSI says the soar was primarily pushed by banking complaints—which rose 56 per cent in comparison with 2021—whereas funding complaints elevated by eight per cent.
OBSI says it opened 1,151 instances final yr, additionally a brand new file excessive and a rise of six per cent from the final file set in 2021.
“These higher volumes continued a trend we have seen throughout the pandemic period, as Canadians, small businesses and financial services firms continue to cope with unprecedented economic challenges, increasing levels of financial stress, and increasing rates of financial fraud,” mentioned Sarah Bradley, Ombudsman and CEO at OBSI, in a news launch accompanying the report.
BANKING CASES
People complaining about their financial institution accounted for 686 instances OBSI handled in 2022—a 33 per cent enhance from 2021’s 514 instances.
Bradley says on high of financial pressures introduced on by the COVID-19 pandemic, adjustments final yr to monetary client protections legal guidelines have additionally led to extra complaints being delivered to and addressed by means of the system.
More shoppers than ever are making use of Canadian banks’ inside complaint-handling companies to resolve their issues and a file quantity are escalating their issues to us for an unbiased knowledgeable overview of their case,” Bradley mentioned.
According to the report, fraud was the main concern for complaints towards banks in 2022. Thirty-one per cent of banking instances opened by OBSI had been fraud-related, a rise from 22 per cent in 2021. Most fraud instances concerned complaints concerning e-transfers, bank cards and wire transfers.
Nineteen per cent of all banking complaints had been about service points, whereas bank card chargebacks made up seven per cent of all banking instances. OBSI provides complaints about rates of interest elevated from 9 instances in 2021 to 26 instances final yr.
Credit playing cards, private chequing and financial savings accounts and e-transfers had been the highest banking merchandise folks raised complaints to OBSI about in 2022. Credit card complaints made up 32 per cent of all banking instances, financial savings and chequing account complaints made up 15 per cent, whereas complaints about e-transfers accounted for 14 per cent.
INVESTMENT CASES
Cases involving investments decreased in 2022 by about 18 per cent, in comparison with 2021.
“Investment cases started the year with some moderation to near pre-pandemic levels, but surged later in the year, largely driven by investor concerns relating to ongoing market downturns and volatility, as well as increasing problems associated with fraud and service issues,” Bradley mentioned.
According to the report, fraud-related instances jumped drastically to 11 per cent of all funding instances in 2022, an increase from one per cent in 2021.
A breakdown of funding instances consists of:
-
Mutual funds – 37 per cent -
Common shares (equities) – 33 per cent -
Service points – 21 per cent -
Investment suitability – 15 per cent -
Fee disclosure – Eight per cent
The latest class of complaints—crypto belongings—was the third most typical criticism for buyers in 2022, accounting for 11 per cent of all funding instances.
“The rise in crypto asset complaints is associated with the increasing regulatory oversight of cryptocurrency dealers, which led to a number of dealers joining OBSI in 2022 as participating firms,” OBSI mentioned in a launch.
With information from The Canadian Press
