Canada’s Ombudsman for Banking Services and Investments (OBSI) says it responded to a record high of more than 10,000 public inquiries in 2022, and the number of fraud complaints rose dramatically year-over-year.
OBSI is a national and independent not-for-profit that deals with disputes between people and financial services. In its 2022 annual report, OBSI recorded a 40 per cent increase in public inquiries year-over-year. OBSI says the jump was mainly driven by banking complaints—which rose 56 per cent compared to 2021—while investment complaints increased by eight per cent.
OBSI says it opened 1,151 cases last year, also a new record high and an increase of six per cent from the last record 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,” said Sarah Bradley, Ombudsman and CEO at OBSI, in a news release accompanying the report.
People complaining about their bank accounted for 686 cases OBSI dealt with in 2022—a 33 per cent increase from 2021’s 514 cases.
Bradley says on top of economic pressures brought on by the COVID-19 pandemic, changes last year to financial consumer protections laws have also led to more complaints being brought to and addressed through the system.
More consumers than ever are making use of Canadian banks’ internal complaint-handling services to resolve their concerns and a record number are escalating their concerns to us for an independent expert review of their case,” Bradley said.
According to the report, fraud was the leading issue for complaints against banks in 2022. Thirty-one per cent of banking cases opened by OBSI were fraud-related, an increase from 22 per cent in 2021. Most fraud cases involved complaints regarding e-transfers, credit cards and wire transfers.
Nineteen per cent of all banking complaints were about service issues, while credit card chargebacks made up seven per cent of all banking cases. OBSI adds complaints about interest rates increased from nine cases in 2021 to 26 cases last year.
Credit cards, personal chequing and savings accounts and e-transfers were the top banking products people raised complaints to OBSI about in 2022. Credit card complaints made up 32 per cent of all banking cases, savings and chequing account complaints made up 15 per cent, while complaints about e-transfers accounted for 14 per cent.
Cases involving investments decreased in 2022 by about 18 per cent, compared to 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 said.
According to the report, fraud-related cases jumped drastically to 11 per cent of all investment cases in 2022, a rise from one per cent in 2021.
A breakdown of investment cases includes:
- Mutual funds – 37 per cent
- Common shares (equities) – 33 per cent
- Service issues – 21 per cent
- Investment suitability – 15 per cent
- Fee disclosure – Eight per cent
The newest category of complaints—crypto assets—was the third most common complaint for investors in 2022, accounting for 11 per cent of all investment cases.
“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 said in a release.
With files from The Canadian Press