Insurance issues dominate complaint centre’s first year

(February 4, 2004) The consumer complaint centre for the financial services industry received more than 3,500 complaints in its first year of operation. The majority of those concerned insurance, says the Centre for the Financial Services OmbudsNetwork (FSON), which released its annual report today.

The centre — which began operating in November 2002 — received more than 2,000 general insurance complaints, mainly from consumers concerned about auto premium increases, policy cancellations or claim settlements.

Life and health insurance accounted for about 500 complaints, mostly disputes about disability claims, FSON says.

There were also about 500 banking complaints on a variety of issues, including problems with chequing and savings accounts, loans and credit cards.

About 300 mutual fund and investment complaints were logged in 2003, as consumer expressed concerns about the suitability of the advice they received, transaction errors and service.

Half of the complaints received were referred back to the company involved, says FSON CEO Pierre Gravelle. “It makes sound business sense to settle disputes and concerns as soon as they arise and no one is better positioned to deal with clients than the firms themselves,” he says.

About one-quarter of complaints were referred to industry association consumer assistance centres operated by the Canadian Life and Health Insurance Association and the Insurance Bureau of Canada.

The industry-funded OmbudsNetwork, based in Toronto, acts as a clearing house for financial services inquiries and complaints. It’s the top level of a multi-tier service, which also includes three independent ombudservices for banking and securities, life and health insurance, and general insurance.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com