Key highlights for the year include:
“In the 2015/16 financial year, consumers lodged 4,760 complaints with CIO. 61% of complaints were resolved in the consumers’ favour, resulting in consumers receiving $5.8 million in compensation or refunds. It’s no wonder that 66% of consumers indicated that they were satisfied with our services,” said Mr Raj Venga, CIO’s Ombudsman.
Systemic issue investigations remained a core focus for CIO because they have the potential to cause widespread harm. CIO identified 57 definite systemic issues in the 2015/16 financial year, an increase of 84%.
“Our systemic issues investigations led to refunds or compensation being paid to consumers, as well as other remedial outcomes,” Mr Venga added.
The systemic issues identified related predominantly to responsible lending, credit reporting, debt collection, industry complaint handling systems, and other poor industry practices.
“These positive outcomes underscore CIO’s success in providing effective dispute resolution services to consumers and their financial services providers.
“These outcomes would not have been possible had CIO not led the way with a number of initiatives since its inception, such as:
“More recently, CIO has taken leadership by amending its terms of reference to enable it to expel a financial services provider who fails to implement a remediation program recommended by CIO to address a systemic failing. This will enable CIO to impose remediation orders in its own right without having to refer matters to regulators for enforcement.
“These initiatives have spurred reform and raised best practice in other parts of the Ombudsman sector, and in so doing, produced ongoing benefits for consumers and small businesses.
“Any move to consolidate the two existing finance sector Ombudsman schemes, as being suggested by some, would stifle innovation and generally result in less accountability. A single scheme would no longer be subject to benchmarking against an alternative scheme. Turnaround times, service levels and continuous improvement would inevitably suffer,” Mr Venga continued.
“Submissions to the present review of EDR schemes show that industry associations and individual providers covering about 98% of the operators outside the major banks are in favour of retaining the existing regime of two ombudsman schemes.
“It is no coincidence that smaller financial services providers, including fintechs, looking to disrupt the major banks and bring increased competition to the financial sector are resoundingly in favour of retaining the existing regime.
“The narrative on this issue is very clear: those financial services operators competing with the major banks to deliver consumers a better deal and a more competitive financial system are in favour of the present two-Ombudsman scheme model. Only the incumbent major banks think that a single scheme is a good idea”, Mr Venga added.
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Annual Report on Operations 2015-2016 [PDF 16 MB]