Media release - Credit and Investments Ombudsman welcomes terms of reference into financial sector’s complaints framework

Sydney, 8 August 2016 -- The Credit and Investments Ombudsman (CIO) has welcomed the release today by the Minister for Revenue and Financial Services, Kelly O’Dwyer MP, of the terms of reference for the independent review of financial sector external dispute resolution (EDR) schemes.

Both CIO and the Financial Ombudsman Service (FOS) are approved by and operate within guidelines established by the Australian Securities and Investments Commission (ASIC). The ASIC guidelines ensure consistency on key matters such as monetary thresholds, and this is an opportunity to test whether those policy settings continue to meet the needs of all users, including consumers and industry.

Mr Raj Venga, Ombudsman and CEO, said “The terms of reference allow some significant questions to be asked and answered, including questions about access, powers, funding, and our ability to be flexible enough to respond swiftly to rapid changes in the financial services sector and the design and delivery of financial products and services.

“Measuring the effectiveness of complaints-handling in this area is enhanced by the fact of the two ASIC-approved schemes being able to benchmark their performance against the other. This has been demonstrated repeatedly through the independent reviews of each schemes, producing better consumer and industry outcomes each time, and will undoubtedly assist the work of the panel through the course of this review.”

While the terms of reference limit the scope of the review to the financial system’s EDR framework, CIO encourages the panel to consider the broader issue of consumers being able to navigate the various EDR schemes in each of the telco, financial services, energy and utilities sectors. Convergence is increasingly blurring the lines between traditionally distinct areas (telecommunications and payments being just one example), and the events that can give rise to complaints are increasingly likely to affect consumers in a number of areas (for example, where a consumer is in financial difficulty and is not able to pay their telco, financial, energy or utilities bills).

CIO believes that a consumer-facing common help desk – essentially an online and telephone access point – is the preferred option.  It would be able to:

  • assist consumers at first instance by providing them with information about how to pursue a complaint with a business,
  • where appropriate, refer the consumer to specialist services (eg. financial counsellors, consumer legal services or Lifeline),
  • register the complaint, if appropriate, and
  • importantly, direct the consumer to the appropriate EDR scheme or schemes to handle their complaint.

“This is a wonderful opportunity to think expansively about the real and emerging issues being faced by real people and the business that they deal with, and the ways that EDR can best assist all parties to resolve disputes quickly, cheaply and effectively,” Mr Venga said.