In theory, provincial - The Ontario Securities Commission is the channel for securities related complaint handling. The first attempt representing some 300 limited partners in Allied Canadian investments generated a flow of rejection letters with standard opening remarks: “Thank you for your inquiry to the Ontario Securities Commission (OSC) concerning … A review of your matter has been conducted by OSC staff and I welcome this opportunity to reply … with all aid, short of assistance. Ending in gratitude; “We appreciate the time you have taken to bring this matter to our attention”.
Standard polite ‘Do Nothing’ service delivery options generally note; “It is not in our mandate,” or, “We can’t comment on matters in litigation”. Finally, and for special cases: the OSC has an arbitrary time lapse limitation - reserved for persistent and troublesome people.
The author’s JAD analysis of the scheme must have intrigued the OSC. It resulted in an invitation to present the details of the Bank’s ‘Sitting Duck Loan’ scheme to interested investigating officers. They praised the substantive effort and in a heartwarming decision, took the evidence for an investigation. But it didn’t last. In a matter of weeks the file was returned with a letter ruling that investigating fraud, which has no statute of limitations in criminal cases, is subject to a six year OSC administration statute of limitations. This is measured from the initial securities transaction, rather than when any violation becomes apparent or reported. An unfortunate thing for people caught in a scheme that relies on a wickedly long fuse for a delayed sting, when the OSC simply writes; “I welcome the opportunity to advise you it’s too late to complain”.
In this case, the OSC also rejected, without reading, a third and separate complaint from the author’s wife about ‘Flipping’ the ‘Investment Property’ in an alleged ‘Non-arms Length’ re-acquisition deal for Allied Canadian to sell again in a REIT. But when pressed for a response, rather than writing, the case officer phoned the complainant’s husband with an OSC manager to reinforce plain and brutal advice; “Stop bothering us about Bank lending practices and Allied Canadian Limited Partnerships” concluding, “We will not reopen your file”.
After years of letter writing, and finally enclosing the debtor’s storybook with a request to reopen the quashed OSC investigation to the Prime Minister and Party Leaders, the then Minister of Finance Mr. Ralph Goodale escalated the issue to the Commissioner of Financial Consumer Agency of Canada for a second review.
FCAC demonstrates a keen sense of irony repeating their bureaucratic mandate:
“The Financial Consumer Agency of Canada does not have jurisdiction over contractual matters, or the general service standards of the financial institutions it regulates”.
If it has no jurisdiction, how and what it is regulating? Does any other agency have jurisdiction? The rejection went on:
“… Legislation requires all federally regulated financial institutions to have in place a complaint-handling process”.
And ended with a gratuitous recommendation:
“… Consumer concerns are important to us and we recommend you direct your complaint to the Bank of Montreal”.
As an alternative agency, the OSC recommended the Ombudsman for Banking Services and Investments (OBSI) to handle the complaint and provided a toll-free number to contact. The OBSI uses a P.O. Box number address for all correspondence. And, while an Ombudsman’s Office is supposed to be an open and accessible public service, the OBSI does not welcome people with complaints. It must live in fear of the masses. The solid office door which is always closed has a full width brushed steel plate across it - with a clearly visible strong combination lock and a watchful security camera on the side. On arrival and being observed, a speaker greets people with a message that complaints must be sent in by mail.
Still, the OBSI was the quickest to respond with the standard excuse about not commenting on matters in litigation. Strangely, the Ombudsman for Banking Services and Investments wrote neither ‘Tied Loans’ with investments, nor ‘Systematic Predatory Lending’ are in its mandate, and returned the complaint for the OSC’s attention, and to the government representative Ms. Bonnie Brown as the right and proper channel as the constituent’s representative in these matters.
Well ‘Systematic Predatory Lending’ isn’t in litigation. How could it be? It is a lawful business Bank practice where ethics enforcement and consumer protection is a matter of political will.
No one denies it happens including; the leaders of major political parties who wrote appreciation for receiving a book that speaks of government hypocrisy and intransigence. And the Minister of Finance aware of the issue, and the constituent’s M.P., and all the government agencies that ignore consumer protection concerns about ‘Tied Loans’ … everyone simply refuses to talk or do anything about an acknowledged abuse in the industry: ‘File Closed’.
Aside from seeking help from members of parliament and government agencies, people can approach the police with fraud allegations. It requires an easy case that’s quick to prove. Nothing like Bank business guidelines, where another ‘Tied Loan’ for a second Allied Canadian investment appears to have been approved on the basis of a manufactured loan application sent in from the notarizing lawyer’s office. The loans officer apparently accepted a previously used document in lieu of a signed but otherwise blank ‘Statement of Affairs’ presented by the agent. The document is still in the Bank’s possession, and they will not ‘VOID’ it to prevent its reuse. So while the first loan application was fully documented and legally binding with signatures, the second undisclosed loan is a possible candidate for an investigation into fraud …
But the police have lots of cases and limited resources, and the investigating detective quit when the benefiting notarizing lawyer cited in the allegations simply failed to return a phone call message requesting information to assist inquiries. The officer decided it was a complex case that would be a waste of time investigating. With nothing illegal about accountants filling out loan applications and witnessing signatures: there could be no charges. No laws are broken. And with counter arguments from perpetrators - that victims are sophisticated investors and know all about ‘Signature Affidavits’ and ‘Agency Waivers’ for Bank purposes, and see them witnessed by people who get the money … fraud is hard to prove. It’s simply a case of you - people - being stupid enough to sign documents without reading or understanding them first … “You can’t blame the Banks or anyone but yourself”.
Unfortunately, it’s a view upheld in the courts, and with the officer critiquing the book and wondering out loud, “Will you ever stop fighting it!” the phone call ended. “File Closed”.
People generally don’t know about ‘Bank Loan Game Rules for Sitting Ducks’ that only work when con artists follow ‘No Wrongdoing Guidelines’ to trick people into debt. It should be a public awareness issue: But the practice remains; undisclosed, unchallenged and unabated.
