Should I use the institution's internal “ombudsman “?
dealers are required to respond to a complaint within 90 days. Offers for compensation are binding on the dealer.
you receive a response to your complaint from the dealer ( or bank)
you have a few choices. You can accept the decision, abandon the
complaint altogether , use IIROC binding arbitration ( if an IIROC
dealer), take legal action , refer the complaint to the Ombudsman for
Banking Services and Investments (OBSI ) or the firm may “encourage”
you to use their internal "ombudsman". The banks and
insurers have created these entities to give the institution a second
chance. We view the diversion from regulator-approved OBSI as an
is well known that the more steps in a complaint process, the greater
chance the complainant will give up and drop the complaint. If the
internal “ombudsman” confirms the dealer position, most
complainants will not have the will or fortitude to start all over
with OBSI .It is entirely possible a complainant with a very valid
claim could be shortchanged.
internal “ombudsman” is run quite differently than Ombudsman
authorized by regulators. Such entities lack the transparency real and perceived independence and disclosures as compared to true institution - independent ombudsman services such as a OBSI.Recommendations by an internal " ombudsman" are not always binding on the parties involved.The use of an internal “ombudsman” is
entirely voluntary but you may be nudged by the dealer to use it,
rather than OBSI. Once you receive the final response from the dealer
, you have 180 calendar days to bring your complaint to OBSI. Before consenting to use an internal “ombudsman” you
should be informed. There are risks and pitfalls to consider. You
need to ask some questions before giving consent.
list of questions we provide is comprehensive. But don't worry about
asking them all. After the first few questions , based on our
experience, you will quickly become uncomfortable with the responses
or worse, you will not get any responses. That's why Kenmar suggest
going directly to the Ombudsman for Banking Services and Investments
(OBSI) if you intend to pursue your complaint. At least that way you
can avoid being rejected a second time by the same institution.
is a free, institution-independent ombudsman service endorsed by
securities regulators and overseen by them. Unlike a bank or insurer internal " ombudsman", a complaint to OBSI
stops the limitation time clock. Compensation can be recommended up
to $350,000 .In 2016, nearly half ( 45% ; 150/323) of investment
complaints ended with monetary compensation - average $ 15,552 . The
latest OBSI satisfaction survey showed that 75% of respondents rated
the quality of service as good / very good. Visit www.obsi.ca
for more information
are the questions an investor should be asking before voluntarily
opting to use an internal bank ombudsman:
In what percentage of complaints do you recommend restitution greater
than that offered by the dealer?
What is the average and target time to investigate a complaint?
What are your user satisfaction statistics?
Have you ever been employed by the dealer/ bank before becoming
Is any part of you or your staff compensation package tied to bank
To whom do you report?
Do you receive company stock options? Shares?
Who approves your annual operating budget?
Are your offices and locale physically separate from the dealer/bank
Are you overseen by a regulator or other independent organization?
Are you periodically audited by a third party and are the results
Do you assist Complainants in formulating their complaint?
What is your loss calculation methodology?
> How does your
investigation process work?
> Is there a dollar limit on
your recommended compensation?
>What happens to my case file records after you provide me with a
Do you deal with systemic issues ?
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