Financial consumer complaint service officially launched

(November 29, 2002) Canadian consumers now have access to a national call centre and Web site dedicated to handling complaints about the country’s financial services industry. The Centre for the Financial Services OmbudsNetwork, first announced last December, was officially launched today.

The centre, based in Toronto, will act as a clearinghouse for questions about the industry, explains chief executive officer Pierre Gravelle. “If consumers have concerns or complaints with their providers and are unsure how or where to begin, they can make one call and be put in touch with someone who will guide them through the complaint resolution process,” he says.

Manny Da Silva, formerly of DALBAR Canada, heads up the complaint service. He says the primary goal is not to resolve problems, but to refer customers back to the initial point of sale. “After that, there’s a network of company and industry levels,” Da Silva told Advisor.ca in a recent interview. “Our role is to simplify all that.”

The centre has no legal or regulatory power, but can produce non-binding recommendations, including restitution or compensation. This “moral suasion” approach has worked well in the past for the banking industry. Bank ombudsman Michael Lauber says there has never been a case in which a bank has not followed one of his recommendations.

As well as handling complaints, the OmbudsNetwork will provide educational material, promote best practices and provide feedback to the industry on consumer trends.

The centre is funded by the participating industries on a cost-sharing basis. There are no fees for consumers who use the service.

The Financial Services OmbudsNetwork is the umbrella group for three separate complaint services for banking and securities, life and health insurance, and general insurance.

Mark Daniels, president of the Canadian Life and Health Insurance Association, admits the multi-level network can be confusing for consumers, but points out that combining the three ombudsman services is problematic because each operates with different standards, handling unique disputes.

“So the idea of having one network that could handle a disability case or a commercial bank dispute or an automobile insurance case, we decided that was too big a jump,” he says.

A single portal that can usher complaints to the right place makes more sense, Daniels adds, but he says that doesn’t mean the services won’t be combined sometime in the future. “We’re all committed to seeing how this works for a year or so, but we think there are prospects for bringing it under one single administration.”

Investor advocate Glorianne Stromberg has called the network a step in the right direction and has praised the centre’s Web site. However, she believes there’s still a need for a central depository with detailed information about financial advisors and the firms they deal with.

The centre can be reached at 1-866-538-3766 (for service in English) or 1-866-668-7273 (for service in French). The network’s Web site is www.cfson-crcsf.ca.

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca.