The new ‘one-stop shop’ financial complaints authority announced in the Federal Budget will help Australians get free, fair and fast dispute resolution against financial institutions.
“Australians need one, high-quality service to resolve their disputes against financial institutions quickly and fairly. The one stop shop announced today is a sensible move that can help Australians get justice,” said Gerard Brody, CEO of Consumer Action Law Centre.
Eight leading consumer groups called for an enhanced one-stop shop in joint submissions to the Review of the Financial System External Dispute Resolution and Complaints Framework (Ramsay Review), led by Professor Ian Ramsay.
Consolidating the Financial Ombudsman Service (FOS), the Credit & Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal into a single industry ombudsman scheme will reduce the confusion and inconsistent outcomes currently caused by gaps and overlaps between the three schemes.
The new authority will award compensation of up to $500,000 for consumer disputes, $1 million for small business disputes, and have unlimited jurisdiction for disputes relating to guarantees and superannuation. The Australian Securities and Investments Commission (ASIC) will also be given a greater role to monitor how firms deal with complaints internally.
“Banks and other financial firms need to be accountable when things go wrong,” said Mr Brody. “These reforms will mean fewer gaps in coverage so justice will not be denied.”
The Final Report of the Ramsay Review was also released on budget night and recommended that:
- Debt management firms like debt agreement brokers and credit repair companies be required to be members of the new body,
- There be further consultation on whether the compensation caps for consumer matters should be increased to $1m.
“Improving dispute resolution with an enhanced complaints authority is one part of the solution,” warned Mr Brody. “We also need to focus on preventing poor conduct and harmful financial products in the first place, and how we can bring greater integrity and fairness to the culture of the banking and finance sector.”