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FOS welcomes formal terms of reference into Australia's financial system external dispute resolution

8 August 2016, 10:30 AM

The Financial Ombudsman Service Australia (FOS) has welcomed the release of Terms of Reference (the terms) for the review of the dispute resolution (EDR) and complaint framework for the financial system.

The terms were released today by Minister for Revenue and Financial Services, the Hon Ms Kelly O’Dwyer, MP.

FOS endorses the work of the independent expert panel and the key considerations set out to guide the review. Access by consumers to effective independent dispute resolution was recognised by the Financial Service Inquiry as essential in achieving fair outcomes for consumers and supporting trust in financial services.  

Chief Ombudsman, Mr Shane Tregillis, said: “FOS is committed to the principles of fair, open and simple resolution of financial disputes. Reducing complexity for consumers in accessing effective independent dispute resolution has the strong support of FOS.”

FOS has received over 240,000 complaints since 2008 and resolves disputes between consumers and financial service providers in a co-operative, efficient, timely and fair manner; with minimum formality and technicality; and as transparently as possible, taking into account our obligations for confidentiality and privacy. 

Under FOS’s new dispute process we have significantly reduced the time taken to resolve disputes without compromising on quality. Other than a couple of complex disputes, all the open disputes we are currently dealing with were accepted by FOS after 30 June 2015.

While the panel will not be able to make recommendations on a compensation scheme of last resort, the panel will be able to make observations on this important gap in the current regulatory framework. 

“FOS has been a longstanding advocate of a compensation scheme over many years. It is essential for the effective operation of external dispute resolution that consumers who get an award of compensation by FOS can be confident that this compensation will be paid.” Mr Tregillis said.

“FOS looks forward to working with the panel, consumers, industry, regulators and government to ensure Australia has an EDR framework that adapts and evolves to sustainably deliver fair and effective outcomes in a dynamic financial system,” Mr Tregillis said.

Chaired by Professor Ian Ramsay, with Mr Alan Kirkland and Ms Julie Abramson as members, the panel will deliver its final report to Government by the end of March 2017.

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