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Harper government chooses the side of big banks once again as it removes requirement to use independent ombudsman to resolve customer complaints.
Ottawa (04 May 2012) - According to the Public Interest Advocacy Centre (PIAC), banks will no longer be required to resolve customer disputes through the Ombudsman for Banking Services and Investments (OBSI). The Minister of Finance made this announcement yesterday indicating that the government will publish new rules allowing multiple consumer banking arbitration services — effectively allowing Canadian banks to choose their own judge.
"The Minister knows regulations can't fix this. He had to pick between consumers and banks. He chose the banks," stated John Lawford, Counsel for PIAC. "The Minister has betrayed financial consumers by giving in to the bullying of banks."
Despite the Minister signing the G20's Final High-level Principles on Financial Consumer Protection. This agreement supported the common principles on financial consumer protection prepared by the Organisation for Economic Co-operation and Development (OECD) and Financial Stability Board (FSB) that require signatories to have "recourse to an independent redress process."
As PIAC notes, the Royal Bank of Canada and TD Bank have already moved their banking consumer dispute resolution to the ADR Chambers Banking Ombuds Office (ADRBO). According to a recent report of the World Bank, a regime with private arbitrators such as ADRBO, this "presents severe risks to independence and impartiality — because financial businesses may favour the ombudsman they consider likely to give businesses the best deal.
"It overlooks the role of financial ombudsmen as an alternative to the courts and creates one-sided competition — because, unlike the financial businesses, the consumers are not given any choice of ombudsman."
"The Minister has betrayed financial consumers by giving in to the bullying of banks to kill an effective, fair and independent banking ombudsman," concluded Lawford.
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