Canadians have long complained about the service provided by Canada's big banks. Surveys by the National Quality Institute in 1996 and 1997 of 8,000 Canadians found that banks ranked in the bottom five of 21 industries in customer satisfaction. Unfortunately, there is no independent ombudsman bank customers can appeal to for an impartial hearing to address their complaints.
Between 1993 and 1995, all the big banks appointed their own ombudsmen. In October 1994, the House of Commons Standing Committee on Industry urged that "the government establish an independent office of the Bank Ombudsman to investigate complaints of breach of duty or maladministration by the banks. As in the United Kingdom, the ombudsman should have the power to require banks to pay compensation to complainants for financial loss, inconvenience and stress."
In 1995, the federal government worked with the banks to set up an ombudsman office to deal with complaints that could not be resolved between a client and their particular bank. However, this ombudsman, the Canadian Banking Ombudsman, was selected by the banks, and is directed and paid through an organization set up by the banks.
All the evidence reveals that the current system is unfair and biased toward the banks. In addition to all the ombudsmen being employees of the banks, the system is flawed as follows:
Canadians deserve a fair, efficient and impartial ombudsman system with the power to resolve complaints about financial services. In contrast to Canada's system, the British and Australian models of bank ombudsmen are more fair to consumers, as their ombudsmen are independent and can make binding rulings.
The CCRC recommends that the federal government ensure a fair complaint-handling and ombudsman system for Canadian financial consumers by acting on the House Industry Committee's recommendation and establishing an independent banking ombudsman that Canadians can appeal to if their complaint is not resolved by their bank.
Banks (including foreign banks) should be required to:
In addition, the federal and provincial governments should take steps to ensure that customers of other financial institutions (trust, insurance, and investment companies, and credit unions) also can appeal to an independent ombudsman to have their complaints addressed.
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Canadian Community Reinvestment Coalition
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Copyright 1997 CCRC