Law Times

Law Times • December 3, 2012 Page 5 NEWS Consumer advocates call for single ADR service for banks using the services of OBSI," the submission reads. Passmore says a single provider would help regulators more easily identify systemic issues in complaints rather than looking across multiple organizations and would onsumer advocates have repeated their calls also ensure greater consistency in decision-making. for a single regulated dispute resolution service "You get more effective oversight and it's also more to deal with Canadian banking complaints afcost-effective for the government to have one rather than ter federal regulations opened the door to mulmany providers," Passmore says. tiple providers. Under the ombudsman system, she says, consumers The Ombudsman for Banking Services and Investknow exactly where they need to go when they have a ments had been the de facto sole provider since its forbanking problem. She also argues OBSI is better set up to mation in 1996 with all banks participating in its process help consumers with the complaints process considering on a voluntary basis. But that all changed in 2008 when the power imbalance between the two parties. the Royal Bank of Canada exited in favour of its own "We think that an ombudsman has to act according provider, the ADR Chambers Banking Ombuds Office. to a set of principles that includes a responsibility to TD Bank followed suit in 2011. Critics of the defections hoped the government Many consumers know there's something wrong but help them articulate their complaint. It's an informal process," she says. would step in to mandate OBSI membership, but in they can't really structure what the issue is in a very "Many consumers know there's something wrong July of this year, the federal Department of Finance but they can't really structure what the issue is in a instead unveiled proposed new rules that set miniprecise way. So to get them to write all that down very precise way. So to get them to write all that down mum standards for any organization that wishes to and send it in before you'll help them is a barrier. and send it in before you'll help them is a barrier." become an external complaints body. Watts says she's hopeful the federal agency will The rules require all banks to use bodies federally approved by the Financial Consumer Agency of Canada Now it's shopping for your own judge. The policy of gov- tighten its guidelines when it comes up with its final list after an in-depth review process. The agency will also ernment seems to be that the external dispute resolution following the public consultation. "They're obviously taking it seriously and engaging area is open for business and I think that runs contrary to have the authority to monitor and enforce compliance. in a respectful conversation. They've done a good job "Today's sweeping new rules will give more power to a lot of the common sense of the public." The Consumers Council of Canada also weighed in in addressing the issue head-on and it's my hope when consumers looking to resolve a dispute with their bank by creating a stronger, more independent consumer- with its own submission to the agency urging it to des- they come back it's with greater clarity and with a betcomplaint system," trumpeted Finance Minister Jim Fla- ignate a "single, regulated independent external provid- ter framework to ensure there isn't forum shopping and er with a strong governance process" to deliver banking judge shopping," she says. herty as the regulations were released. "Right now, the regulations as proposed cause me sig"This will happen by putting in place, for the first dispute resolution. "The approach to independent external consumer nificant worry. They look very weak compared to intertime ever, a new framework that sets pro-consumer standards all banks and authorized foreign banks must dispute resolution and redress taken by major banks such national standards." Still, Passmore says the proposed rules are an immeet and will ensure federal government supervision as Bank of Montreal, Canadian Imperial Bank of Comof the external complaints body's compliance with the merce, and Scotiabank by using the services of the Om- provement on what had existed. "When RBC and now TD left OBSI, they went to budsman for Banking Services and Investments as is now new regulations." But at the Canadian Foundation for Advancement constituted better protects the rights of consumers and ADR Chambers and there was no framework by which of Investor Rights, associate director Marian Passmore makes it easier for consumers to manage their responsi- they have to operate. There were no guidelines or govhas doubts about the description of the standards as "pro bilities than does the alternative method offered by the ernment oversight at all. So it's obviously better from that LT Royal Bank of Canada and TD Bank since they stopped perspective," she says. consumer." BY MICHAEL McKIERNAN Law Times C "It provides more choice and control for the bank, not for the consumer," she says. "They get to contract with the external compliance body of their choice, but the consumer does not get any choice." Laura Watts, former chairwoman of the consumer and investor advisory council to OBSI, says she worries confidence will suffer when it comes to for-profit bodies paid for by the banks. "It looks like consumers don't have a lot of protection and that banks could forum shop. In my view, the regulations don't do enough to quell the fear that banks will be able to go out and try to choose the service delivery mechanism that will give them the best result," she says. "It's not just buying your own judge as it was before. Congratulations to our Inaugural GPLLM Class! We are proud to announce the 2012 GPLLM graduates: Jack Bensimon, Kathryn Daniels, Allan Ebedes, Nils Engelstad, Ricardo Fisher, Emilija Giovinazzo, Zuzanna Kusyk, Dana Lezau, Alan Luk, Mark Mahoney, Shrianand Misir, Matt Mortazavi, Shane O'Brien, Peter Ohonsi, Ugljesa Popadic, Cynthia Robertson, Fateh Salim, Matthew Scott, Brian Soye, Stanley Strug, Andrew Szonyi, Miran Ternamian, Kevin Thomas, Hilary Thompson, Denise Williams. For more information and to apply: http://www.law.utoronto.ca/programs/GPLLM.html Supported by the Association of Corporate Counsel (ACC) - Ontario Chapter and in partnership with Carswell, a Thomson Reuters business. GLLM_LT_Dec3_12.indd 1 www.lawtimesnews.com 12-11-28 2:38 PM

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