Financial industry complaints hit record
Ombudsman calls increase in gripes against investment advisers 'staggering'
Complaints filed by consumers against Canada's financial industry last year reached a record, the ombudsman for banking services and investments reports.
The national dispute resolution service opened 990 cases in 2009, ombudsman Douglas Melville said Wednesday.
It processed more than 12,400 individual inquiries from consumers and small businesses.
That was an increase of 48 per cent over the previous year and more than triple the number over the last three years.
Melville noted that recently more filings have been made against the investment industry, instead of banks, driven partly by the global economic downturn, which ravaged stock markets.
"Despite the improvement in the markets over the last year, complaint volumes remain high," said Melville. "We expect this to continue."
While banking sector complaints were up 21 per cent, investment complaints were up what the ombudsman called a "staggering" 73 per cent.
"On the banking side, many of the complaints we saw dealt with mortgage prepayment penalties, rates on lines of credit, or fraud," said Melville.
"On the investment side, the vast majority of cases were related to the suitability of investment advice."
The ombudsman's office can investigate complaints from clients of financial institutions, including banks, investment dealers, trust companies, mutual fund dealers, credit unions and scholarship trust plans.
The service is free to consumers, and the ombudsman can recommend compensation of amounts up to $350,000.
In 2009, consumers received compensation in 28 per cent of the cases reviewed by the ombudsman's office.