Commentary

The “big three” issues in banking services continue to be accounts, loans and cards, with some shifting in the ranking of the products from year to year. In 2008, transaction accounts and card complaints tied for largest category of files. The transaction accounts complaints often involved issues of fraud or service, while loan issues predominantly involved issues around payment terms.

Compared to past years, relatively few complaints were about mortgage prepayment penalties. Card complaints continued to be a large category reflecting the widespread fraud activities involving both debit and credit cards.

A new issue that arose in 2008 was a flurry of complaints from customers of two major financial institutions that had summarily closed customer accounts, both personal and small business. The type of businesses affected were remittance and cheque-cashing operations, and the individuals who brought their complaints to us all had transactions with certain Middle Eastern countries. Our role in these cases is limited to determining whether the bank gave the customer sufficient notice to find another banking services supplier; otherwise, we take the view that the bank has taken a commercial decision and has the right to decide with whom it does business. In the end, all the clients in the cases we saw were given sufficient time to rearrange their affairs.

However, subsequent research indicated that the likely source of the actions by the firms was new and tougher anti-money laundering legislation, aimed in part at ensuring these illegal activities aren’t financing terrorist organizations. Under that legislation, not only do firms risk their reputation, but face stiff penalties, if they are found to be associated with money laundering activities. The banks had simply ended their relationships with customers doing transactions in certain “hot” countries. We suggested the clients get in touch with the federal government to air their views on how they were affected by this legislation.

Major Issues in 2008