A Government appointed panel has recommended all financial services related external dispute resolution schemes be rolled into a single entity that would cover advice, investment, credit and superannuation disputes.
The three member EDR Review Panel also recommended higher monetary limits and compensation caps that were subject to regular indexation while also stating there was merit in introducing an industry funded compensation scheme of last resort.
The recommendations are part of an interim report produced by the Panel which called for the Financial Ombudsman Scheme (FOS) and the Credit and Investments Ombudsman (CIO) to be merged as they overlapped in a number of areas.
The report also stated the Super Complaints Tribunal (SCT) should transition from its rigid statutory model to a more flexible ombudsman scheme before being merged into the combined FOS/CIO scheme once both schemes have received strong consumer and industry support.
The panel stated that the current EDRs provided a viable alternative to the court system but “…the current framework, consisting of two industry ombudsman schemes and a statutory tribunal is the product of history rather than design…” leading to consumer confusion, duplicated costs and inefficient allocation of resources for the financial services sector and ASIC.
Following the release of the report the Federal Government indicated it would support the development of a single EDR scheme with the Minister for Revenue and Financial Services, Kelly O’Dwyer, welcoming the report and its recommendations.
“The Government is committed to a one-stop shop for consumer complaints handling that provides consumers with access to justice, the independent determination of disputes, timely reviews and a robust compensation scheme,” O’Dwyer said.
“The Turnbull Government is committed to ensuring consumers and small businesses are provided with a better, faster resolution process for their complaints, and that the framework is operating as efficiently and effectively as possible,” O’Dwyer stated.
The Minister said the Panel would continue to receive submissions on the draft recommendations prior to the release of its Final Report in late March 2017, with the closing date for further submissions set at 27 January 2017.
The Interim Report and information on how to make a submission is available here.
Is one body going to speed up a claims dispute process? Many claimants go broke waiting for a claim to be resolved. If there was a legislated code of practice on claims with penalties for protracted delays created by Life Companies there would be no need for a FOS or COSL.
Is this going to be another NBN disaster that was created by Malcolm Turnbull, does the rhetoric look familiar, get this right as all the plastering in the past has achieved little.
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