Media release - Ombudsman cautions on tribunal
Mr Raj Venga, Chief Executive Officer and Ombudsman of the Credit and Investments Ombudsman (CIO), today expressed concern about the proposal apparently being considered by the Federal Government to establish a ‘tribunal’ to hear financial services complaints.
“Australia is currently very well served by the existing dispute resolution architecture in financial services. The types of disputes referred to in the current debate about the need for a new body generally involve amounts that exceed the monetary limits of CIO and the Financial Ombudsman Service (FOS), and so have not been able to be considered by either scheme”, Mr Venga said.
“The more appropriate course would be to expand the jurisdictional limits and responsibilities of the existing Ombudsman schemes in the financial services sector, rather than creating a new body. CIO is committed to reviewing monetary caps that apply to small business complaints, as well as other aspects of its jurisdiction,” Mr Venga continued.
According to Mr Venga, the establishment of a tribunal, which will necessarily be a statutory scheme, would:
- create a tax-payer funded right of appeal to the courts, defeating the objective to resolve disputes fairly, cheaply and expeditiously,
- not have the multiplicity of access points for industry and consumer representation that the current structure affords,
- not have specialised industry knowledge required for the sensible resolution of disputes,
- be substantially more inflexible, and
- not be capable of responding quickly to changes in relevant markets.
CIO receives about 22,000 enquiries and 5,000 complaints a year. It’s 23,000 members include non-bank lenders, finance companies, consumer lease providers, small amount lenders, debt buyers, credit unions, building societies, finance brokers, credit reporting bodies and time share operators.
“We strongly urge Government to consider the wider impacts of the establishment of such a tribunal and to ensure that any decision about a tribunal or other changes to the dispute resolution landscape are fully in-formed and very carefully considered.
“The current independent review into dispute resolution and complaints services, chaired by Professor Ian Ramsay, should be asked to consider the relative merits of establishing a tribunal as compared to other models of dispute resolution”, Mr Venga concluded.