Learn about the main issues we face when dealing with banking and investment firms. Get 10 tips for protecting yourself. Tyler also explains how to get free help from the Ombudsman for Banking Services and Investments (OBSI). Tyler Fleming is the Director, Stakeholder Relations and Communications at OBSI. Here are the slides from his presentation at Insider Advice for Today's Topsy-Turvy Times, which took place at the Ted Rogers School of Management on February 6, 2014. Details at http://bit.ly/money5050b

1. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
Feb 6, 2014
Tales from the Confidential
Files of OBSI
Insider Advice for Today’s Topsy-Turvy Times
February 6, 2014
Tyler Fleming
Director, Stakeholder Relations and Communications
Presentation is incomplete without the
accompanying oral commentary
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2. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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Tales from the Confidential Files of OBSI
Agenda
Introduction to OBSI
Common themes and our observations
Top 10 Tips
Questions
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3. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
Feb 6, 2014
INTRODUCTION
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4. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
Feb 6, 2014
Tales from the Confidential Files of OBSI
Some Context
OBSI is not a regulator nor a consumer advocate, although we do advocate for
effective dispute resolution.
Our observations are drawn from the very small proportion of complaints that reach
our office.
Recent FCAC research suggested there were over 300,000 financial consumer
complaints. We saw only about 8,000 in 2013.
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5. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
Feb 6, 2014
Tales from the Confidential Files of OBSI
Who We Are
OBSI is Canada's independent dispute-resolution service for banking services and
investment clients with a complaint they can’t resolve with their firm.
An alternative to the legal system.
Started in 1996 covering major chartered banks.
Became the Ombudsman for Banking Services and Investments in 2002 when our
mandate expanded to all members of the:
Investment Dealers Association (IDA), now IIROC
Mutual Fund Dealers Association (MFDA)
Investment Fund Institute of Canada (IFIC)
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6. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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Tales from the Confidential Files of OBSI
Who We Are (Cont'd)
OBSI currently has approximately 600 participating firms, including:
Banks
Credit Unions
Federally-regulated trust companies
Investment dealers
Mutual fund dealers
Scholarship plan dealers
Portfolio managers
Exempt market dealers
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7. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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Tales from the Confidential Files of OBSI
Who We Are
Investigation services available in English and French, while customer inquiries can
be handled in over 170 languages.
Service is free to complainants.
We can recommend restitution of up to $350,000.
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8. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
Feb 6, 2014
Tales from the Confidential Files of OBSI
Canada’s Unique Environment for a Financial Sector
Ombudsman
Banking is federal; trust companies can be federal or provincial.
Credit unions are provincial, but that system is currently evolving.
Non-bank consumer credit is provincial.
Securities regulation (investment leverage loans) is provincial (for now).
Consumer protection issues are predominantly provincial.
Criminal Code provision restricting interest rates to 60% is federal.
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9. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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Tales from the Confidential Files of OBSI
What We Do
Conduct non-legalistic, confidential and independent reviews of complaints that
haven’t been resolved to the satisfaction of consumers.
Look primarily at cases of direct financial loss resulting from error, misleading
information or bad advice.
Take into account laws, regulations, industry standards and practices, and firm
policies to decide what would be “fair under the circumstances”.
Seek to make the client “whole” where maladministration is found to have occurred.
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10. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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Tales from the Confidential Files of OBSI
What We Do (Cont'd)
Neither a court nor a regulator, we do not fine or discipline firms or
individuals.
We make recommendations to the firm, which are not binding on either
party.
Clients do not forfeit their legal rights; they may reject our findings and start
legal proceedings.
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11. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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Tales from the Confidential Files of OBSI
What We Do (Cont'd)
The Olive Branch: OBSI gives participating firms an impartial service to
which they can refer their unresolved complaints.
The Stick: OBSI will make public any participating firm’s refusal of a
recommendation.
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12. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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Tales from the Confidential Files of OBSI
Governance
Board majority of Community Directors (independent of industry).
Community Directors must not be associated with either industry or
government for two years prior to appointment.
Chair of the Board is a Community Director.
OBSI’s budget, and the hiring and evaluation of the Ombudsman, require
both a Board majority and a majority of Community Directors.
Board does not get involved in any investigations.
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Tales from the Confidential Files of OBSI
Our Investigative Process
We review the file to make sure it is within our mandate.
We then conduct an initial assessment of the file based on the final response letter
the client received from their firm, as well as any other material provided by the
client.
If we determine a full investigation is warranted, the client and firm sign a letter
agreement with provisions for privacy release, confidentiality, and no subsequent
use.
Following that, the firm sends us their complete internal investigation file.
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14. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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Tales from the Confidential Files of OBSI
Our Investigative Process (Cont'd)
We conduct our investigations based on interviews with the relevant players, as
well as a document review.
Compensation recommendations take into account actual costs or losses,
mitigation issues and accrued interest. Some non-financial losses are also
considered (e.g., negative credit bureau reports).
We discuss our findings with both parties, and finish with a comprehensive report
outlining the reasoning behind our conclusion.
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15. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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COMMON COMPLAINT
THEMES & OBSERVATIONS
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Tales from the Confidential Files of OBSI
Statistics
In 2012:
446 investment case files (up 10%)
210 banking case files (down 47%, largely due to TD’s departure)
Case file volumes more than tripled with the financial and market meltdown of 200809.
The most frequent complaint issues were investment suitability, debit and credit card
fraud, mortgage penalties.
Complainants receive compensation in about 30% of the case files we review.
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Tales from the Confidential Files of OBSI
4000
3500
3000
2500
2000
1500
1000
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18. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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Tales from the Confidential Files of OBSI
Complaint Themes - Banking
Deposit scams
Debit and credit card fraud
Online security – phishing
Mortgages
Credit/collections
Credit bureau information
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19. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
Feb 6, 2014
Tales from the Confidential Files of OBSI
Complaint Themes - Investments
Suitability of investment advice
Suitability of individual investments
Suitability of portfolios
Unauthorized transactions
Deferred service charge issues (disclosure, suitability)
Transaction errors
Use of leverage
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20. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
Feb 6, 2014
Tales from the Confidential Files of OBSI
Do investors understand:
The risks associated with investments?
The difference between risk tolerance and loss tolerance?
That higher returns come at the expense of higher risk?
The disclosure given by firms?
The complexity of products available?
The fees associated with investing?
Their responsibility to read their statements and mitigate losses?
The need to document and retain everything?
The need to save for retirement early?
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21. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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Tales from the Confidential Files of OBSI
Case Study – Negligent PIN Selection?
Bank customer met a woman at a bar.
After several hours of drinking and conversation, he headed home with her.
Discovered his wallet was missing the next morning, checked at the bar, then notified
his bank.
Thief had made point of sale purchases of $2,000 and $1,400 in cash advances on
the Visa account overnight; ABM withdrawals from several accounts at different
banks.
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22. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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Tales from the Confidential Files of OBSI
Case Study – Negligent PIN Selection?
Client claimed he was not responsible for all the losses.
Crook tried various PINs; hit the right combination after 6 tries.
Should the customer have been reimbursed for the amounts taken? Show of hands
please....
Does your answer change when you learn that...
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Tales from the Confidential Files of OBSI
Case Study – Negligent PIN Selection?
The woman was a prostitute.
The man had been drinking heavily.
The woman was also a professional thief with prior convictions; she was convicted
but the money was gone.
The man had used the same PIN on all his cards and chose an easy one to
remember...1-2-3-4.
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Tales from the Confidential Files of OBSI
Case Study – Negligent PIN Selection?
The man did not read or understand English or French.
The man was 71 years old.
The man had used the same easily remembered PIN for all his cards because his
cognitive abilities were failing.
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25. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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TOP TEN TIPS
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26. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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Tales from the Confidential Files of OBSI
Top 10 Tips
1. Read everything you sign: Few people bother to read in full every document they
sign. They should. Understand what you are signing to avoid nasty surprises down
the road.
2. Ask questions: Knowledge is power. If something isn’t clear to you, ask for more
information or clarification. If you still don’t understand, bring along someone you trust
so you both hear the explanation.
3. Keep records: The individual or institution you are dealing with will have a record of
their interactions with you. So should you. Take notes of important conversations,
confirm instructions in writing, and keep copies of everything.
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27. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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Tales from the Confidential Files of OBSI
Top 10 Tips
4. Save your money: Set aside a portion of your income each month for your
retirement and unforeseen events. Life is full of surprises; have a contingency fund in
place for the unpleasant ones.
5. Review your account statements: Carefully review all account documents sent to
you each month, whether by mail or electronically. Report any errors or suspicious
activity immediately; if you wait too long, you might be held responsible.
6. Safeguard personal information: Keep your financial documents in a safe and
secure place. Shred all personal financial information that you no longer need so the
bad guys can’t use it.
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Tales from the Confidential Files of OBSI
Top 10 Tips
7. Plan ahead: Have a financial plan so in the future you can live the life you want.
Don’t be caught unprepared in later years.
8. Make a will: They say that the only things certain in life are death and taxes. No
matter how old you are, make sure that you have a valid and updated will. If you
don’t, you lose control over where your wealth goes. Don’t let lawyers or the
government make the decision for you.
9. Create a Power of Attorney: Regardless of your age, have a valid power of attorney
in place in case you become unable to manage your own affairs. By doing so you can
prevent heartache for your loved ones should something happen to you.
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29. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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Tales from the Confidential Files of OBSI
Top 10 Tips
10. Speak up: Most banking services and investment firms want to do the right thing for
their customers. If you have a concern or complaint, don’t be afraid to let your
financial services firm know. If they can’t make things right for you, know that there
are other places where you can go for assistance, like the Ombudsman for Banking
Services and Investments.
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30. Money 50/50: Insider Advice for Today's Topsy-Turvy Times
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Tales from the Confidential Files of OBSI
QUESTIONS?
Website: www.obsi.ca
Email: ombudsman@obsi.ca
Toll-free Telephone: 1-888-451-4519
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