Consumers Council of Canada News

May 2012


Canada must have simple, effective system of consumer redress for banking complaints

May 14, 2012 1:36 PM
CCC Admin

NEWS RELEASE

The Consumers Council of Canada urges the federal government to create a national statutory ombudsman for banking and investments now that it has become clear that Canada’s banks cannot peacefully cooperate within a system of dispute resolution that meets international standards of justice and fairness for consumers.

"The Minister of Finance should secure immediate commitment to the Ombudsman for Banking Services and Investments from the banks or legislate that, if at any time the government believes the banks lack commitment to OBSI, then it will exercise its authority to mandate an ombudsman," said Council President Don Mercer.

The Council respects the best efforts made by the Bank of Montreal, Scotiabank and the Canadian Imperial Bank of Commerce to facilitate OBSI. However, it has become clear the good example of these and other banks participating in OBSI has not rubbed off on the Royal Bank of Canada and TD Bank.

These two renegade banks threaten to undermine a constructive private-sector initiative that has improved consumer redress for individuals and small businesses. Many consumers assisted by OBSI have been vulnerable consumers with special needs.

All potential customers of the Royal and TD banks should carefully review the dispute resolution rights offered to them as an important factor in choosing a bank. Some current customers of the Royal and TD could find themselves caught at a disadvantage in resolving a dispute based on the changed terms of their banking relationship.

The federal government should exercise caution in creating or promoting new red tape that will complicate consumers’ pursuit of redress, when what is required is simple direction to the banks that they must support and submit to a national ombudsman.

OBSI slowly has increased its credibility as a series of scandals and market meltdowns since the 1990s led financial institutions to empower it to resolve consumer complaints rather than have government step in to impose a public system of dispute resolution.

OBSI has always been a compromise approach to consumer redress, albeit one that may have helped influence Canada’s banks to stay away from contentious sales and service practices that have plagued their foreign subsidiaries and competitors. OBSI’s ability to address the needs of vulnerable Canadians and small business owners has been important and welcome.

In recent years, Canadians have been proud of the relative safety and security within their banking system. Canada has been relatively immune to the political unrest and utter loss of consumer confidence manifesting itself in other large national economies. Canada’s banks will prosper most by maintaining an excellent relationship with their customers.

  

Ontario wireless contract bill welcome step

May 10, 2012 5:00 PM
CCC Admin

The Consumers Council of Canada welcomes the introduction by Ontario Minister of Consumer Services Margarett Best of Bill 82, the Wireless Services Agreements Act, 2012, an act to strengthen consumer protection with respect to consumer agreements relating to wireless services accessed from a cellular phone, smart phone or any other similar mobile device.

The Council believes Ontario consumers deserve protection around terms of service for contracts of all kinds, based on easy to understand principles.

"Contracts for cellular voice and data services and equipment rate as top-10 sources of consumer complaints in Ontario," said Consumers Council of Canada President Don Mercer. "Many consumers feel their rights are unfairly limited and find it hard to understand their responsibilities under these agreements. Quebec has already exercised its authority for contracts in this area. Other provinces across Canada should take responsibility and prompt action, as well."

The Council similarly supported a private members bill proposed by Ontario MPP David Orizietti and is encouraged that the Ontario government has decided to make this initiative part of its agenda. The private members bill enjoyed all-party support, so the Council is optimistic the government's bill will receive broad support.

"This is an opportunity for MPPs from all parties to show they can put the public first and work together to improve consumer protection," said Mercer. "Reducing marketplace confusion is good for competition and good for business in the long run."
Mercer said the Council favours a harmonized approach nationally, so consumers don't become confused about the rights and responsibilities they enjoy from one province to the next. He said the Council found it encouraging that the Ontario proposals track existing law in Quebec. 
"The small differences between the Ontario and Quebec positions we understand to be based on lessons learned in Quebec," said Mercer. "Perhaps Quebec consumers will soon enjoy additional consumer protection improvements now proposed in Ontario." 
The Ontario bill is said to propose greater protections for consumers of wireless phone, smart phone and data services. The legislation would require clear disclosure of all optional and mandatory services, including the disclosure of “hidden fees” and improve consumer protection concerning contract cancellation.
A similar bill has been proposed in Manitoba, and a private member's bill has been tabled in New Brunswick. With public dissatisfaction running high and provincial legislatures beginning to act, the Canadian Radio-Television and Telecommunications Commission, which has sat on the sidelines, has consulted the public about whether it should conduct a review of the state of competition among cellular companies to assess the need for federal regulation.