CFFiM just said the quiet part out loud

Canada’s financial complaint system is again being asked to shrink its ambition: settle the individual dispute, close the file, keep the learning small. That view surfaced clearly in a recent submission to the Ombudsman for Banking Services and Investments’ (OBSI) independent external review by the Canadian Forum for Financial Markets (CFFiM), a national association that represents investment firms.

CFFiM argues that OBSI is “not a classical ombuds model,” should not have binding powers, should be cautious about helping consumers frame complaints, should stay out of public education and fair-practice guidance and should focus “solely on case findings.” It also warns that information-sharing with regulators risks turning OBSI into an outsourced complaint centre and intelligence-gathering channel.  

CFFiM’s submission says the quiet part out loud. It prefers an OBSI that decides individual cases, says little about broader conduct, limits assistance to complainants and keeps regulators at arm’s length.

That is a narrow, regressive view of an ombud service. It is also a revealing one.

A modern financial ombud service cannot be reduced to a private settlement office. Complaints are market signals. They show where disclosure failed, where sales practices misled consumers, where controls missed repeat conduct and where products were not understood. Treat every complaint as a sealed one-off dispute and the system learns too little, too late.

The model CFFiM is advocating for protects firms. It does not protect consumers. The stakes of that choice are clearest in the debate over binding authority, where industry pushback dresses self-interest in the language of due process.

Fairness, independence and natural justice are legitimate concerns. Firms should know the case against them and have a meaningful opportunity to respond. But fairness cannot be an alibi for delay.

Delay tactic

While Canada’s securities regulators have proposed giving OBSI binding authority, their framework is over-engineered. It runs in two stages: an investigation and recommendation stage, followed by a review and decision stage if either party objects.

For recommendations of $75,000 or more, OBSI would have to appoint an external decision-maker or panel to conduct a second-stage review and issue the final binding decision.  

That is not due process. It is a carefully designed delay tactic.

Each new safeguard becomes another hurdle consumers must clear. Firms have lawyers, compliance teams and time. Consumers have a grievance and a ticking clock. Calling that a level playing field does not make it one.

Other common-law jurisdictions, bound by the same principles of natural justice Canada relies on, have shown that binding financial ombud service outcomes can coexist with fairness without turning the process into a miniature court.

In the U.K., if a consumer accepts the Financial Ombudsman Service’s final decision within the required timeframe, the decision is binding on the business. If the consumer rejects it, the business does not have to comply and the consumer may still be able to take the matter to court.

In Australia, for most complaints, an Australian Financial Complaints Authority decision becomes binding on the financial firm if the complainant accepts it. If not, the complainant keeps the right to pursue the matter through the courts.  

Canada does not need to copy either model. It needs to stop treating binding authority as a radical departure from fairness. The unfairness in the current system is a redress process where a consumer can win an OBSI recommendation and still face resistance, discounting or delay before receiving meaningful compensation.

Individual case findings

Limiting OBSI to individual case findings, as CFFiM urges, would jeopardize its public-value dividend. OBSI is uniquely positioned to identify issues that could affect broader groups of consumers or suggest substantial systemic improvement.

It reports trends, case data and case studies, shares anonymized data with regulators and must report systemic issues of specific regulatory interest. It does not investigate those issues itself. The Financial Consumer Agency of Canada and the Canadian Securities Administrators decide whether further investigation is needed.  

That is not mission creep. That is the mission.

Helping consumers is another thing CFFiM would have OBSI do less of. Assisting a consumer to define a complaint is not improper advocacy.

Few consumers know whether their problem is unsuitable advice, misrepresentation, failure to follow instructions, unauthorized trading, poor disclosure or fraud liability. A complaint system that requires consumers to speak the industry’s language before they can be heard is accessible in form only.

None of this means OBSI takes the consumer’s side. It should not draft a consumer’s case or prejudge the facts. But helping a consumer identify the issue is part of making redress real. Case studies, bulletins and trend reports do not turn an ombud service into a regulator — they help consumers and firms understand fair treatment in practice.

Canada has already taken too long to treat OBSI as the system it needs to be. That system starts from one premise: complaints are evidence. Treat them as private disputes and you protect the appearance of order. Treat them as evidence and you improve products, conduct and supervision.

Canada should choose the second — not because it is more aggressive, but because it is more honest.