The Banking complaints process -as demonstrated by the real life experiences of a consumer

Anyone that has to file a complaint with a bank, should read this letter. It has been our position for a decade that the complaint system is broken. We continue to call for a statutory Ombudsman service completely free of industry influence. Our regulators and lawmakers must start listening. This letter was sent by Mr. Stenzler to senior officials at the Financial Consumer Agency of Canada and the Ombudsman for Banking Services and Investments. We continue to caution about the use of so-called bank " ombudsman".

November 27, 2017

To whom this may concern:

RE:  The Banking complaints process – as demonstrated through the real life experiences of a consumer

I have personally gone through the banking complaints process twice in my lifetime; once in 2010 against the Royal Bank of Canada and again in 2014 against the Bank of Nova Scotia.  While I understand that there are many interests staking out various competing positions ostensibly based on THEIR subjective interpretation of the fairness and appropriateness of the current banking complaints process, I am of the belief that the true experiences of the consumer must be taken into account by all stakeholders in order to understand what is really happening under the current rules and how those rules should be changed for the better.  The consumer, being a key participant in the banking complaints process, is also a stakeholder in that process.   Below, I offer you my personal experiences of the banking complaints process as one of the many consumer voices that deserves to be listened to on this matter. 

My complaint against the Royal Bank of Canada (“RBC”) alleged that RBC employees were responsible for a privacy breach that directly resulted in the termination of a multi-million dollar business deal to which I was a party.  My complaint was escalated through the four internal stages established by RBC – that complaint was rejected as having no merit by each of those stages.  Finally, through mediation at the ADR Chambers Banking Ombudsman, RBC agreed to pay me compensation in the sum of $50,000 based on my initial complaint.

My complaint against the Bank of Nova Scotia (“BNS”) alleged that a bank employee made additions, in his own handwriting, to my personal statement of net worth (“Statement”) without my knowledge and consent and forwarded that Statement to other employees of the BNS representing that I had authorized his additions (i.e. I alleged that the bank employee committed the criminal acts of forgery and the uttering of a forged document).  My written complaints were escalated according to the stages set out by the BNS.  My complaint was ignored by the bank employee who I alleged committed the aforementioned crimes, ignored by his manager and summarily rejected by the BNS Office of the President.  In his investigation the BNS Ombudsman concluded that the bank employee did in fact make additions to the Statement after I had signed it and without my knowledge or consent yet reasoned that he did so in order to help me qualify for a loan (that is, this supposed independent Ombudsman concluded that a forgery of a document by a bank employee took place, that the forged document was uttered to other bank employees but that all of these acts were acceptable because the bank employee had a benevolent purpose guiding his actions).

Ultimately, OBSI rejected my attempts to have them investigate my complaint on the basis that the subject matter of the complaint (a banker’s criminal activity) was outside of their mandate.  The matter is now in litigation before the Ontario Superior Court.

While the specifics of my stories are not what truly matters in this debate (and I am more than happy to discuss and/or provide records to anyone who may request them in support of the truth of what I have written herein), what truly matters is the way in which I, as a consumer, was treated by the banking complaints process under the current regulations/rules – that treatment was neither fair nor reasonable by any standard.  I wish to state that I was born in Canada and I speak and write English proficiently.  My language skills, along with my desire to fight for what I believe is right, were instrumental in my being able to navigate the nuances of the banking complaints process.  I have spoken to numerous other bank consumers and I can reasonably conclude that many consumers do not file complaints about the banks because they are intimidated by the banking complaints process, do not understand their rights or how to navigate the process itself, are afraid of the possible negative consequences of complaining about their bank, do not possess the written or oral skills to effectively advocate for themselves and/or simply give up on a process believing that they have no chance of succeeding against a bank. 

It takes a great deal of time, research, self-confidence and strong communication skills in order to voluntarily enter into what is an adversarial process against a well-financed, highly trained adversary who has unilaterally established the rules of that process.  Let’s be honest here, the number of lodged consumer complaints against a bank represents a “drop in the bucket” of the complaints that consumers could lodge if those same consumers believed they had any chance at being treated fairly by a process that is currently heavily stacked in favour of the banks.   

Both of my bank complaints were initiated in writing and forwarded to the bank employee who I alleged was directly responsible for the complaint.  Prior to formalizing my complaints, I had to research the respective bank’s complaints process as it differs somewhat from bank to bank (this entailed online readings of the banks respective websites, Government of Canada websites and blogs about how to formulate an effective complaint to a bank).  I formatted the complaint in my best “legalese” and made copies of what I believed to be records that supported my complaint (without legal guidance, I was left to make decisions about what to include in my complaint based on what I believed to be best knowing that the complaint could or would be scrutinized by bank lawyers who would view my submission in order to determine if I could be an effective adversary – after all, this is an adversarial process by definition and if bank lawyers conclude that I am not a competent advocate they are more inclined to advise bank employees to “blow-off” my complaint). 

After submitting the initial complaint I was left to wait, indefinitely, as there are no guidelines stipulating if, when or how that initial complaint is to be addressed.  In fact, with respect to my BNS complaint, it was totally ignored by the BNS employee (that is, it was neither acknowledged nor responded to).  Is it fair or reasonable that there are no rules requiring an employee who has received a complaint to acknowledge it and act on it in a timely manner?

Unsatisfied by the RBC employee’s response, and after waiting about three weeks for no response from the BNS employee, I escalated both complaints to their respective bank managers.  In order to do this I had to research who these managers were (this was done by telephoning the respective banks central telephone numbers), obtain the managers contact information and finally resubmit my complaint (with supporting materials) under a new cover letter which had to be drafted to include the response (or in BNS’s case the lack of a response) to my initial complaint.  Would it not seem reasonable that the bank employee who received the initial complaint be responsible for forwarding it to the proper next level person after either being asked to do so by the complainant (if he/she has received a response) or within a reasonable time frame (eg. 14 days) if the bank employee choose to not respond to a complainant? 

Again, as in the previous stage, there is no requirement under any rules that require a manager to acknowledge receipt of a complaint or respond to that complaint in any set time frame or at all (and apparently there are no consequences for a manager’s failure to acknowledge or respond to a complaint).  As I stated earlier, the BNS manager chose not to acknowledge or respond to my complaint and apparently did so with impunity.  Is the lack of any rules during this second stage of the banking complaints process either fair or reasonable to a complainant?

An unsatisfactory response from the RBC manager and a lack of response from the BNS manager resulted in me escalating the complaint further.  Again, I had to research who and where this next party in the process was, redraft a cover letter and resubmit my complaint with supporting records as if nothing I had done prior to this step had taken place.  Again, is it not reasonable for the bank managers to have the responsibility of forwarding a complaint to the next level if requested to do so by the complainant?  As a consumer I can only conclude that the banks complaints process is designed, in part, to wear out the complainant – does this repeating of steps mandated by the process and placed on the shoulders of the complainant in any way contribute to a fair and reasonable dispute resolution process?

The third level of complaint within the RBC complaint’s process resulted in my receiving a formal acknowledgment in writing of RBC’s receipt of my complaint and a statement as to how they intended to conduct their investigation.  The third level of complaint in the BNS process resulted in me receiving a telephone call from someone who identified themselves as “Trevor from the Office of the President.”  In that telephone call “Trevor” advised me that I would not be receiving a written response from the Office of the President and that his office had summarily rejected my complaint – he offered no reason for his shocking statements and given that his statements were made verbally and without me being able to authenticate the source of his telephone call, I did not believe him to be authentic at the time of the call. 

I never did receive anything in writing from the BNS Office of the President in response to my complaint; thus, I concluded that “Trevor’s” telephone call was real.  Is it reasonable for someone to call me and offer me only verbal statements in response to a written formal complaint made as a bank client and alleging that a bank employee engaged in criminal activity?

The third level RBC adjudication of my complaint resulted in RBC concluding that while my complaint may have some merit with respect to a breach of confidentiality, that breach, if it occurred, did not result in me losing any money.  RBC did advise me in writing of my right to escalate my complaint to their internal ombudsman.  With respect to BNS, they did not advise me of my right to escalate my complaint to their internal ombudsman either in writing or verbally.  Nonetheless, in both cases I escalated my complaints to the bank’s respective Ombudsman’s offices.  And yet again, I was required to resubmit my complaint in its entirety to the Ombudsmen’s offices as though I had taken no previous steps in the complaint’s process.  The Ombudsmen’s offices acknowledged my complaints in writing and set out time frames as to their respective investigations.

The RBC Ombudsman requested that I execute an agreement as a precondition to their investigation.  The BNS Ombudsman agreed to conduct an investigation into my complaint without me having to execute any agreements (despite the fact that the BNS website sets out that a complainant must execute an agreement as a precondition to an ombudsman led investigation).  In both cases, in entering into an agreement or not, I made my decisions to proceed with the process without the benefit of independent legal advice (is it reasonable or fair for a complainant to enter into agreements with a bank that may affect his/her rights going forward without the benefit of legal advice?  Should a complainant be expected to engage the services of a lawyer at this time in the complaints process?).  In conducting their respective investigations neither ombudsmen requested any further information/documentation from me (aside from that which I originally provided to them) nor did either ombudsman apprise me of the information or documentation provided to them by bank employees or agents. 

As such, if a bank employee or agent made statements to the bank ombudsman that were demonstratively false, I was not made aware of those statements nor was I given an opportunity to provide the ombudsmen with the evidence that I possessed that would prove the employee’s claims as false (should there not be fair and open disclosure of all evidence to both sides of a dispute if that dispute is supposedly being investigated by an independent ombudsman who only wants to ascertain the truth of the matter?).

My investigation of the bank’s ombudsman determined that: a) the bank ombudsman was not truly an ombudsman by any stretch of the definition of the word ombudsman; and b) the bank ombudsman was an employees of the bank, being paid by the bank who, in most cases, was previously a long term employee of the bank who came from other departments within the bank had established relationships with other bank employees; and c) that the ombudsman worked within premises populated by other bank employees; and d) that the ombudsman was hired first and foremost with a mandate to protect the bank from litigation liability.   It is clear to any reasonable person that the ombudsman’s inclusion in the dispute resolution process is solely for the benefit of the banks.

The banks use of the title “Ombudsman” is designed to intentionally deceive the consumer into believing, incorrectly, that their investigator/employee is supposedly acting independently and fairly throughout his/her investigation.  This is obviously misleading at best, an intentional fraud at worst.  How can an investigator from the bank’s ombudsman’s office be impartial given that he/she is an employee of the bank, may have existing relationships with parties being complained about and is ultimately accountable to the legal team of the bank?  – Who’s kidding who here?  The use of the title “Ombudsman” is not being made in good faith by the banks as the banks know that the ombudsman’s true purpose is to protect the bank at the expense of the consumer (no ombudsman elsewhere in the world has such a disguised purpose).  In contrast to his/her true purpose, the bank ombudsman is marketed to the consumer as that of a fair, impartial and independent investigator. 

The bank’s use of misleading titles such as ombudsman, vice-president and advisor is intentional and serves the purpose of hiding the true motivations and allegiances of those title holders.  Advisors and vice-presidents (outside of true corporate vice-presidents) are really salespersons while bank ombudsmen are truly – while I don’t know how else to say this – shills for the bank’s legal team.  Why is this bastardization of nomenclature allowed by regulators?  How many consumers, believing that a supposedly impartial ombudsman has ruled against them, abandoned their complaint?  Do regulators truly believe that bank ombudsmen are fair to the consumer despite being employees of the bank?

The RBC ombudsman did not rule in my favour; therefore, I escalated my complaint to the ADR Chambers Banking Ombudsman (the “ADRBO”).  Having never heard of the ADRBO prior to being referred to them by the RBC Ombudsman, I was quite concerned when I learned that they were not a government funded organization but rather a private organization that was compensated directly by RBC – the optics of this clear conflict of interest was very concerning.  Again, I had to formalize my complaint directly to ADRBO by resubmitting my entire complaint with supporting materials which now had to include the decision of the RBC Ombudsman.  And yet again, in order to take advantage of ADRBO services, I had to enter into a lengthy agreement without the aid of independent legal advice.  So I ask, is the consumer being fairly or reasonably treated throughout this process by having to enter into numerous agreements without legal advice? 

ADRBO suggested that the parties agree to non-binding mediation – I agreed to their suggestion again without the aid of legal advice.  I prepared for a day of mediation where I was to stand, as an individual, opposed by two RBC lawyers in front of a mediator who himself was a lawyer.  Would a lawyer as arbitrator take me, a non-lawyer, seriously or would he be predisposed to favour the presentations of lawyers like himself?  Was this process going to be fair to me?  As I stated earlier, I was victorious in the end and received a settlement of $50,000.00.  I was told through four stages at RBC that my complaint had no merit (at least in terms of cost consequences); however, it was ultimately determined that my complaint did have merit and was worthy of compensation.

The bank’s lawyers told me that the monies paid to me proved that the complaints process does work for the consumer.  I informed the bank’s lawyers that the fact that I had to stay the course for over ten months, jump through a large number of hurdles, commit to endless hours of repeated document preparation and submission and attend to a full day hearing on my own behalf in a process I had no previous experience with, demonstrated to me that the process was neither fair nor reasonable and does not work (despite the outcome).  How many other complainants could have or would have done all that I was required to do in order to receive some level of justice?  How many others would have been intimidated by the process and dropped it without receiving any compensation?  How would someone who does not speak or write English as a first language have done through the various stages in this process?  Clearly, this process can work but only for a select few?

The BNS ombudsman offered his decision in writing and set out my right to appeal that decision to the OBSI.  I made that appeal and was subsequently advised by the OBSI that issues alleging forgery are not within their purview.  So despite the fact that I followed the bank’s complaints process, I was apparently not entitled to have my complaint investigated by the OBSI.  At the suggestion of the OBSI my complaint was translated into a civil suit that is currently in litigation.  Is it fair or reasonable that the OBSI limit itself to only certain ill-defined categories of complaints?  Should consumers be advised to contact the OBSI at the initiation of a bank complaint to see if that complaint falls within the OBSI mandate?

My intention in forwarding this letter to you is to apprise you of the real life steps (and possible outcomes) one must follow in order to comply with the current banking complaints process.  While I have many suggestions as to how this necessary process can be made better (and fairer), I will withhold those suggestions in favour of my belief that at this time voices such as mine should be heard and understood prior to any attempts to correct the flaws in a system that is both complex and necessary.  I wish to remind you that within the current banking complaints process I have, at times, had my complaints ignored (without consequences to those who did the ignoring), have had to wait indefinitely for responses (or lack thereof) from bank employees, received verbal rather than written correspondences in response to a written submission of a banking complaint, etc.  Is this truly the process that regulators wish to defend?

I am happy to share my experiences with anyone who cares and am always willing and able to provide documents and other materials in support of my story.  The current banking complaints process is demonstrably in need of an overhaul.  If bankers, banking lobbyists and self-regulating organizations dominated by banking interests support the status quo, this should be a sure sign to everyone else that current regulations and oversight are not working.  We can do better. 

Truly,

Dr. Gary C. Stenzler