OBSI, bank complaints ombudsman

Can't resolve a dispute?

If you have been unable to resolve a dispute with one of Canada’s financial institutions, you may have been advised to seek redress through the OBSI, bank complaints ombudsman.  Before proceeding down this path it is wise to do your research and understand the purpose, structure and most of all the results of this organization.

Chances of Financial Compensation

Of the 6,000 to 8,000 complaints brought to the attention of OBSI, bank complaints ombudsman in a year, less than 18% are resolved; and of those that proceed through the OBSI complaint resolution process, almost 75 %, do not receive any financial compensation at the end of the process.

OBSI Reason for Existing

The first thing to understand is that the OBSI, bank complaints ombudsman is not an advocate of the consumer, but an extension of the financial industry.    From a strictly practical standpoint it allows its industry members to reduce their cost of dispute resolution in a number of ways.

First, by pooling resources under the OBSI umbrella the financial industry members are able to provide a second-tire complaint-review process at a fraction of the cost of doing it themselves or hiring an independent contractor. 

Secondly and most importantly, by setting up a completely separate organization with its own bureaucracy and time-consuming process, the financial institutions are able to drastically reduce their number of complaints. If the original delaying tactics of a complainant’s own financial institution were not enough to dissuade them, OBSI and its process is often enough to wear the complainant down to the point of abandoning their claim.  Any complaint abandoned as a result OBSI intervention is a further cost benefit to the industry membership saving them time and legal expenses.

The Great Illusion

The whole process only works if the OBSI, bank complaints ombudsman is able to maintain its façade of objectivity.  As long as the complainant believes they are dealing with an unbiased 3^rd party, dealing at arms-length from their financial institution, they are apt to accept the OBSI review as valid and legitimate.  

As no surprise, in the vast majority of cases, the OBSI review will mirror that of the financial institution, proving yet a third level of benefit to the OBSI membership.

Upon seeing a perceived objective 3^rd party come to the same conclusion as their financial institution, many complainants will simply abandon what is, as often as not, a valid claim.

From its questionable use of the term “ombudsman” to its positioning statement of, “we are independent and impartial, OBSI bends over backward (and the truth) to project an image of unbiased objectivity.  The organization is certainly not independent nor can it be impartial. 

Where the Real Power Resides.

OBSI is totally funded by its more than 500 members and as such they ultimately decide on the organizations role and mandate. As any business person will tell you, when your revenue comes from a single source you make sure you dance to the tune of your benefactor

Be aware

·      There is no appeal of the OBSI process

·      If you should be one of the few who are recommended for financial compensation, OBSI will demand you give up legal rights if you accept their recommendation.

·      Statutes of limitation apply, so be cautious of the amount of time you spend on avenues promising little or no return.

Finally,

If you have completed your due diligence and still feel the OBSI route is the route for you, demand they give you the names of persons who have gone through the process, persons you can contact and question. Judge accordingly.

BMO, Bank of Montreal unlisted numbers

Anonymous callers

The daily barrage of telemarketers, research firms and scam artists using the telephone networks to ply their trade, forces most of us to screen our calls, “picking-up” only when we recognize the name of the person or company trying to contact us.  But, if you are a client of BMO, Bank of Montreal one of those unregistered, anonymous callers may be your bank.

BMO, Bank of Montreal is in the custom of using unregistered numbers to contact their customers, sometimes on subjects of great importance to the clients.  Why they participate in this practice of anonymity is a mystery.  One can only speculate that  with some subjects, such as pending interest rate hikes or margin calls, they don’t really want to contact their client base but are forced, by internal policy or regulators, to show an attempt at contact has been made.  Whatever their reasons the practice can have unintended and damaging effects.

Montreal the Tele-fraud Centre of North America 

One of the unregistered numbers they like to use is a 514 area code number, 877-2100. 

For those unfamiliar, 514 is the area code for Montreal, an area code synonymous with telephone scams preying the elderly in the US and Canada.  A CBC documentary reports, “Canada has become a haven for telephone scam artists, with many operating out of Montreal”,

 When using these numbers, BMO will often simply leave a message, “contact the bank”  At best most rational individuals see these unregistered calls as crank calls, not worth responding to. At worst they cause unnecessary angst and worry with clients sensing a scam artist is trying to access their accounts.

By the way, don’t try this number (514-877-2100) outside of Eastern Standard Time Zone business hours unless you speak French.  The number is answered by a French only message, with no reference to BMO, Bank of Montreal, and does not allow you to leave a message. That takes me to the subject of BMO’s practice of contacting clients in languages they don’t understand; but that will have to hold for a future blog post.

Just Wrong

Most BMO, Bank of Montreal clients don’t appreciate being contacted in an anonymous manner.

Most BMO, Bank of Montreal clients simply don’t consider this practice proper business etiquette.

And most clients certainly do not see this as BMO, Bank of Montreal upholding its fiduciary responsibility to its clients, a responsibility BMO has sworn to maintain.

Nevertheless……

Use of Unlisted Numbers Condoned at the Highest Corporate Level

BMO, Bank of Montreal sees nothing wrong in the practice.  They are not only unapologetic, their Ombudsman, John A. Graham BMO.Ombudsman@bmo.com, is on record condoning the practice as acceptable banking practice as defined by BMO,  Bank of Montreal.

Let BMO it is Unacceptable

If you have been a target of this anonymous calling, tell BMO it is an unacceptable business practice.   At the same time lodge a complaint with the Financial Consumer Agency of Canada; Ursula Menke, Commissioner ursula.menke@fcac-acfc.gc.ca; Lucie Tedesco, Deputy Commissioner lucie.tedesco@fcac-acfc.gc.ca

Let me Know

If you have been financially harmed by this practice or otherwise victimized by the BMO please let me know.  With your permission, I may address your situation in future blog posts.  Regardless, messages sent to POedSenior@gmail.com will be kept strictly confidential

           

Remember:

You are important!

You do have rights!

The Magic of Compound Interest

How to Differentiate Rich from Poor

Most of us don’t believe we have any difficulty distinguishing rich people from poor, but a definition that may give you a chuckle goes as follows:

“You can tell those that have from those that don’t by the fact that the rich plan for the third generation, whereas the poor plan for Friday night.”

Besides being a bit of a laugh, there is a little truth in the statement.   The rich have realized that instead of blowing it all on Friday night, they should keep a little back for the proverbial rainy day.  But they have also learned about Compound Interest, allowing the money they do keep back to grow at a surprisingly fast rate.

Most people I have associated with in life have been hard working stiffs like myself.  People, who go off to work in the morning, come home exhausted in the evening and every two weeks or so get a paycheck for their labor.  But, after the rent, car payment, food, cloths for the kids and taxes, there is precious little left to go out Friday night let alone to save. 

Keeping a little back

It was my Mother, the person who looked after the paychecks in our family, who taught me how to approach the subject of saving, to ensure there was something to fall back on when times got tough.  She would take out what she wanted to save first, usually about five percent of the family paycheck.  In this manner she was not tempted to spend everything that came into the house.  She would then budget all the family expenses on what was left over.

Making it grow

However you decide to budget, if you can put away say $100 a month, and are able to invest it at 8%, through the magic of compound interest, you would have $18,780 in ten years.  This assumes the compounding would be done annually.

Simply put, compound interest is paid on the original amount you put away and on the accumulated interest you receive each year.  Compounding is usually done on an annual basis but can be done daily, weekly or monthly.  Generally speaking, the more times an amount is compounded, the more money you will earn from your investment.

You may be able to put away more or less than the example I have given above.  Whatever the amount, you don’t have to be a mathematician to figure out what its future value would be.  There are many interest calculators on the Internet that can make the calculations for you.  Try out a number of scenarios.  You may be richer than you think

Remember

Just remember, the same principle of compound interest works in reverse with mortgages and other forms of loans, and is the reason why many people are surprised to find how much they have paid in interest to settle a loan.

You are important!

You do have rights!

Before You Take Out a Reverse Mortgage, Consider………

Before You Take Out a Reverse Mortgage, Consider………

Recently a friend on mine, about to take out a reverse mortgage, came over for a chat - a third party opinion - before she signed “on the bottom line”.  Our discussion was very focused and I found many of the points were worth passing on.  My post will not cover the benefits of reverse mortgages – there are all kinds of mortgage brokers out there that can do that – but more it covers the cautionary tips that many gloss over when see the amount of money they can receive from a reverse mortgage.

With the stock market melt down of the past few years many seniors on fixed incomes are facing financial problems.   Maybe it is roof that needs repair, or they are being pressured for falling behind on their mortgage payments.

Banks are often Unsympathetic

To add insult to injury when they go to their local bank asking for a loan, they find their application rejected.  Even though an individual may have dealt with the financial institution for 40 years and never missed a loan or mortgage payment, they are told their loan has been rejected because they are unable to meet income and credit qualifications.

In such situations many feel their only option is a reverse mortgage.

What is a Reverse Mortgage?

I will not go into the details but simply put, a reverse mortgage allows seniors 62 years and older (60 in Canada) to borrow money against the equity in their house.

It is a loan that doesn’t have to be repaid until your death; or when you move; or the house is sold.

When enticed by all the cash one can receive through a reverse mortgage, it is some times difficult to keep a rational mind, so here are some things to keep in mind.

The Cautions

·      Never lose sight of the fact that a reverse mortgage is a loan that it has to be repaid.

·      And, that the interest on your reverse mortgage loan accumulates, decreasing the equity in your home over time.

·      Be aware that up-front fees can be substantial.  Fees for appraisals, title searches, insurance premiums etc. can be as much as $10, 000 to $15,000

·      Bear in mind you will still be responsible to pay for your house repairs, property taxes and home insurance

·      If leaving a legacy is important to you, consider there may be little money left to pass on to your children.

·      You may find that there is a penalty for pre-payment of the loan before three years: Six to 11 months’ worth of interest is not uncommon.

·      Remember the principle of compound Interest. Since, on a reverse mortgage, you make no monthly payments, the interest that accrues is treated as a loan advance. Each month, interest is calculated not only on the principal amount received, but also on the interest previously assessed to the loan.

In my opinion a reverse mortgage should be considered a loan of last resort.

If you have considered all the disadvantages and still think a reverse mortgage is best for you:

1)   Shop Around….interest rates, fees and penalties can vary greatly

2)   Sleep on it …..don’t be pressured into making a decision.  Take your time

As to my friend;

After our discussion my friend decided not to  “sign on the dotted line”.  Instead she decided to negotiate a line of credit guaranteed by the equity in her home.  The interest rate was less, the fees were less and her ability to sleep at night improved.

Remember

You are important!

You do have rights!

Bank Responsibilities

Many in my network of friends and acquaintances feel powerless and frustrated by what they see as a lack of accountability and responsibility on the part of large financial institutions.  Whether it is on a large scale as seen with the Lehman Brothers debacle of 2008, or simply the aggravation of not being able to access their accounts because of a bank mal function, banks are notorious for their self interest and lack of regard for their clients.

Scores of my contacts feel helpless when confronted by these large financial behemoths.  They are uncertain of their rights, their bank’s responsibilities and often feel bullied by their financial institution.

Certainly responsibility is a two-way street and as a bank customer you have duties as well.  A case in point would the security of your personal information. Systems and security procedures are designed to keep your personal and financial data confidential at all times. But you have a significant role to play in the security of your information by keeping your log-on information confidential and closing your browser when you have finished your online banking session.

But where most people feel uncomfortable is on the other side of the two-way “responsibility street”.  They find themselves asking, “what are the responsibilities of my bank anyway?”

Many refer to these responsibilities as the bank’s fiduciary responsibility.

This fiduciary responsibility can be described simply as the banks duty and obligation to act in your best interest, to manage your funds in a manner consistent with the

“Duty of Good Faith”, which includes total truthfulness; absolute integrity and total fidelity to your interest. The duty of good faith also prohibits any advantage being taken by the slightest misrepresentation, concealment, threat or adverse pressure of any kind.

There are many definitions of fiduciary responsibility, the Wikipedia reference http://en.wikipedia.org/wiki/Fiduciary_responsibility is but one.

The important thing to remember is that banks have a responsibility to you and not, as they might like you to believe, the other way around.

 The other imperative is to not allow large financial institutions to push you around.

You are important!

You do have rights!

In future blog posts I will talk about how one stands up to large financial institutions and, not only be heard but achieve positive results

Stay tuned

Blog promise

If I am asking you to subscribe to this blog, I'm going to have to provide you with pertinent information.

So here is my promise:

This site is devoted to those who have been victimized by BMO, Bank of Montreal, or otherwise marginalized by the financial industry. 

It is aimed at you, who upon hearing the phrase, “Fiduciary Responsibility”, must click wikepedia for a definition http://en.wikipedia.org/wiki/Fiduciary

but, are pleasantly surprised to find that financial institutions have a responsibility to you and not, as they would like you to believe, the other way around.

This Blog promises to help readers protect themselves; providing insight into the techniques used by BMO, Bank of Montreal and other financial institutions to fleece their clients for their own corporate benefit

In addition to providing tips on how to protect yourself from the predatory practices of BMO, Bank of Montreal, I will demonstrate how you can fight back and not only be heard but achieve positive results.

Subscribe to this blog, follow me on twitter, connect on FaceBook and LinkedIn and watch videos on You Tube. 

You are important!

You do have rights!