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Have a complaint against your bank? You may face an uphill battle, watchdog report suggests – National

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Canadians with complaints against their bank have their work cut out for them if their case happens to be a complicated one.

That’s the main finding of a lengthy government review of the way Canada’s big six banks — RBC, TD, BMO, CIBC, ScotiaBank and National Bank — handle their customer complaints.

More than five million Canadians bring at least one complaint against their bank every year, estimates the Financial Consumer Agency of Canada, the federal financial consumer watchdog. Of those, about 75 per cent are resolved at the first point of contact between customers and their financial institution, according to the FCAC.


READ MORE:
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But if your bank issue happens to be among the 25 per cent of complaints that must be escalated — good luck.

At the next level up, you may encounter bank employees who, while charged with handling your escalated complaint, are also required to look for opportunities to sell you the bank’s products and services, according to the report.

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Banks don’t make it easy for consumers to advance their complaints, leaving it up to those customers to navigate “a complex system that is slow and cumbersome,” the FCAC said. As a result, a significant portion of consumers simply give up, the agency said.

But even if you manage to reach some kind of resolution, the type of treatment you can expect may depend more on how much you matter to the bank as a customer than the degree of harm that any bank error may have done to you, the report stated.






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“Banks have largely failed to set clear parameters in their [complaint handling procedures] to specify when it is appropriate to consider the business relationship — such as the length of time the consumer has been with the bank, the profitability of the consumer’s business with the bank, and the potential to earn future business,” the report noted.

The watchdog did find that Canada’s big banks are doing a better job of monitoring escalated complaints after another of its reports in 2018 flagged a growing risk of bank branch and call centre employees misselling financial products to customers.



However, banks “generally fail” to tell customers they can bring their complaints to an ombudsman after 90 days even if the bank is still looking into it, the FCAC said.

Canadians have the right to bring their complaints to an independent complaints body if the issue is not resolved to their satisfaction in a timely manner. Even getting to an ombudsman, however, is no guarantee of a smooth and satisfactory process, the report suggested.


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The most glaring problem is that, in Canada, there are two bodies that handle bank complaints: the Ombudsman for Banking Services and Investments (OBSI) and the ADR Chambers Banking Ombuds Office (ADRBO). While both are funded by the banks, OBSI is a not-for-profit while ADRBO is a private, for-profit entity.

OBSI was the only banking ombudsman until the Harper government changed the rules to introduce the option for the banks to turn to ADRBO.

RBC, TD, ScotiaBank and National Bank, among the big banks, now belong to ADRBO. CIBC and BMO belong to OBSI. Consumers can only bring their complaints to the body chosen by their bank.

When entities meant to handle consumer complaints compete for banks, “there is a risk they will design their operations to appeal to banks rather than consumers,” the FCAC said, acknowledging a long-standing criticism of the process.

There are also significant differences in the way the two bodies handle customer complaints.

While the report noted OBSI has some work to do to improve, it took, overall, a much dimmer view of ADRBO’s operations. The organization is “not meeting expectations for effectiveness,” the FCAC said.






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Money123: How to build credit from scratch

While OBSI relies on employees with experience in the financial sector to investigate consumer complaints, ADRBO relies on contracts with retired judges and lawyers who don’t necessarily have experience in the industry, the report said.

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The agency noticed “significant inconsistencies” among ADRBO investigations “in terms of the quality and comprehensiveness of their complaint investigation files.”

Of the 94 files for which ADRBO completed an investigation in 2018, 74 per cent favoured the bank and 12 per cent the complainant, with the rest splitting success between the two parties, according to the organization’s latest annual report.

By contrast, of the 417 files for which OBSI made final recommendations in 2018, almost 30 per cent were resolved in favour of customers, according to the organization’s annual report.

The FCAC made a number of recommendations for how both the ADRBO and OBSI could improve their complaints handling and operations and said it will monitor the organizations’ progress in following suit.

However, the agency stopped short of recommending that Canada return to having a single banking ombudsman, as critics have called on the government to do.




© 2020 Global News, a division of Corus Entertainment Inc.





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TML introduces mortgages for credit impaired borrowers

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TML introduces mortgages for credit impaired borrowers

The Mortgage Lender (TML) is launching a range of residential mortgages to cater for borrowers who have suffered some form of credit issue through a change in circumstance.

 

The Lumi-branded range is available up to 75 per cent loan to value (LTV), across four categories to support customers with defaults, county court judgements (CCJs) and mortgage arrears.

The products are available for employed, self-employed and complex income applicants.

Rates start at 4.98 per cent for a two-year fix and 5.29 per cent for a five-year fix at 70 per cent loan to value and are open for loans between £25,001 and £1m.

It also offers criteria for unsecured arrears, bankruptcy and pay day loans outside that of TML’s standard range.

The lender said it was taking a pragmatic approach to the real-world experience many clients are facing and it was providing “a stepping-stone for homemovers or those remortgaging and, in some cases, credit repair”.

TML sales and product director Steve Griffiths said: “Now more than ever lenders need to have criteria that caters for a wide range of customer circumstances and recognise that the last 12 months has been financially difficult for many people.

Doug Hall director of distributor 3mc added: “We are seeing increasing numbers of customers whose financial situation has been impacted by the coronavirus pandemic who need products that are appropriate for their circumstances now.

“Through sharing our knowledge and challenges with lenders, like TML, the specialist lending sector is proving it can meet those needs in a responsible way.

“The launch of Lumi is great news for brokers and customers. It shows lenders are listening and able to respond to the market, improving customer choice and competition.”

 



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Landmark Point Predictive Fraud Study Details Record Year for Auto Loan Fraud in 2020

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SAN DIEGO–(BUSINESS WIRE)–Apr 15, 2021–

Point Predictive Inc., the San Diego-based artificial intelligence and data science company that helps lenders predict the trustworthiness of loan application information, published research detailing increased levels of attempted loan fraud in 2020, which the company believes could continue through 2021.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210415005688/en/

US Auto Loan Fraud Reaches $7.3 Billion in 2020 (Graphic: Business Wire)

The company’s Auto Fraud Report is the auto finance industry’s most comprehensive annual assessment of application fraud risk. The 2020 edition includes unique insights about income and employment misrepresentation, identity fraud, and collateral fraud for US auto lenders, as well as the impacts of the pandemic on this important sector of the economy.

“2020 was a pivotal year for fraud risk, with auto loan fraud reaching $7.3 billion of originations,” said Frank McKenna, Chief Fraud Strategist for Point Predictive. “The pandemic heightened fear and anxiety and likely made consumers more vulnerable to scams and frauds. The ensuing economic turmoil caused an immediate and dramatic rise in unemployment, increasing some people’s willingness to engage in loan fraud. Furthermore, a flood of stimulus money and generous lender forbearance programs simultaneously increased the level of fraud while delaying lenders’ ability to recognize it.”

Many lenders have praised Point Predictive’s research due to the breadth, detail, and scope of the analysis. This year’s analysis drew from the Point Predictive anti-fraud Consortium dataset, a secure and private data science collaboration among dozens of US lenders. The Consortium now includes over 94 million loan applications containing 85 individual fields of data on each application. Every month, activity from 45,000 dealerships contributes to a view of vehicle financing that spans nearly all 157,000 US auto dealers. This data set tracks over $2.7 billion in known early payment default and the company’s machine learning techniques have generated more than 10 billion risk attributes, offering unparalleled insight into mostly hidden risk trends and the ability to predict more fraud than ever before.

“Consortium data is deeper and more predictive of risk than any credit bureau or public records source,” said McKenna. He continued, “This vast and deeply-specific data on each loan application gave us incredible clarity into fraud risk that lenders are exposed to. And one thing is for sure: the risk of fraud to auto lenders rose dramatically as the pandemic unfolded.”

One of the most significant trends addressed by the analysis was the marked uptick in income and employment misrepresentation. As the lockdowns began, Consortium members were suddenly impacted by a 100% year-over-year increase of falsified income and employment claims on auto loan applications, a level of risk which continued throughout the year. Detected among the trend was the use of over 300 new, but bogus employers each month, used by applicants to fraudulently convince lenders of steady sources of income.

Completing a complex risk picture for fraud managers, the report notes that scams like synthetic identity creation, credit washing, and even lawful impacts of credit repair efforts complicate efforts by lenders to guard against fraud in order to more quickly serve trustworthy borrowers.

“As a lender, you have to keep your guard up at all times. No assumptions can be made about any loan application until every single one clears a satisfactory fraud review,” said Steve Christensen, Executive Vice President of Elite Acceptance Corp. “The analysis and outlook from Point Predictive is essential reading in order to be prepared. For Elite Acceptance, the crucial trends to get ahead of are the dealer implications, such as a sale price inflation of over 10% on the top 10 models,” said Christensen. He concluded, “I credit Point Predictive for exposing the truth behind what is presented to lenders by dealers and borrowers.”

Additionally, the analysis of auto loan fraud in 2020 covers other concerning trends, including clusters of fraud in certain states and metropolitan statistical areas (MSAs), new tactics used by self-employed borrowers, patterns of suspicious and ambiguous naming conventions for fake employers, synthetic identity centers, Social Security number manipulation tactics, vehicles subjected to inflated pricing, and the systematic disputing of multiple negative tradelines on a credit report in order to make the borrower appear to be more creditworthy. Power booking is also on the rise, wherein dealers inflate sale prices and falsify down payments to increase the chances of loan approval.

The Auto Fraud Report concludes with recommendations from Point Predictive’s fraud experts for staying ahead of fraud in 2021. Tim Grace, Chairman and CEO of Point Predictive, encourages lenders to bolster fraud defenses and staff. “In times of crisis, there is often a need to reduce costs to stay profitable amidst decreasing volumes. But this is a mistake. The rate of fraud and risk will increase over the next 18 months, making fraud prevention and staffing one of the most important investments you can make in maintaining the health of your portfolio. Resist the urge to cut costs where it matters most.”

Auto, mortgage, and student lenders who are interested in receiving a copy of Point Predictive’s 2020 Annual Auto Fraud Report should contact [email protected].

About Point Predictive Inc.

Point Predictive enables lenders to fund more loans simply with a unique combination of Artificial and Natural Intelligence™ (Ai+Ni™) to power machine learning technology solutions. Point Predictive helps automotive, mortgage, retail and personal loan finance companies to identify the consumer applications with truthful and reliable information without the intense interrogation and verification of data caused by lower tech solutions currently in use. Highly regarded as the most trusted fraud and misrepresentation analytic solution providers, Point Predictive has transformed that trust to enable lenders to fund more loans to more consumers simply. Point Predictive uses big data powerfully orchestrated from millions of examples of true and falsified loan applications, billions of derived proprietary data elements, and scientifically selected third-party data sources to build powerful machine learning models with the added natural intelligence of human experience.

Located in San Diego, California, more information about Point Predictive can be found at www.PointPredictive.com.

View source version on businesswire.com:https://www.businesswire.com/news/home/20210415005688/en/

CONTACT: Dennis Behrman

VP of Marketing & Growth, Point Predictive

858-227-6644

[email protected]

KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA

INDUSTRY KEYWORD: TECHNOLOGY FINANCE AUTOMOTIVE GENERAL AUTOMOTIVE SECURITY BANKING PROFESSIONAL SERVICES SOFTWARE DATA MANAGEMENT

SOURCE: Point Predictive Inc.

Copyright Business Wire 2021.

PUB: 04/15/2021 10:57 AM/DISC: 04/15/2021 10:57 AM

http://www.businesswire.com/news/home/20210415005688/en



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TML announce launch of new residential Lumi products

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Steve Griffiths TML





A new, Lumi-branded, residential product has been launched by The Mortgage Lender, following a rise in demand from borrowers who have been financially impacted by the pandemic.

TML say that the range is available up to 75% loan to value, across four Lumi categories and caters for customers with defaults, CCJs, and mortgage arrears. It also offers enhanced credit criteria for unsecured arrears, bankruptcy and payday loans when compared to TML’s core range.

Lumi products are available for employed, self-employed and complex income applicants. The minimum loan is £25,001 and the maximum loan is £1m with rates starting at 4.98% for a two-year fix and 5.29% for a five-year fix at 70% loan to value.

Steve Griffiths, The Mortgage Lender sales and product director, said: “Now more than ever lenders need to have criteria that caters for a wide range of customer circumstances and recognise that the last 12 months has been financially difficult for many people.

“Our Lumi range, which is available through specialist distributors, takes a pragmatic approach to the real-world experience many of our broker partners are presented with when they are sourcing a mortgage for their clients.

“It offers fair rates combined with a flexible approach to underwriting that provides a stepping-stone for home-movers or those remortgaging and, in some cases, credit repair.”

Doug Hall, 3mc director, adds: “We are seeing increasing numbers of customers whose financial situation has been impacted by the Coronavirus pandemic who need products that are appropriate for their circumstances now.

“Through sharing our knowledge and challenges with lenders, like TML, the specialist lending sector is proving it can meet those needs in a responsible way. The launch of Lumi is great news for brokers and customers. It shows lenders are listening and able to respond to the market, improving customer choice and competition.”

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