Message from the Chief Ombudsman

Influx of disputes to the Financial Ombudsman Service

In recent months the Financial Ombudsman Service has seen a significant increase in the number of new disputes received. We experienced an average 45.4% rise across all divisions in the six months to 31 December 2008, compared with the same period in 2007. This reflected a substantial 85.5% rise in new disputes within Investments, Life Insurance & Superannuation, a 33% rise in General Insurance disputes and 17.8% in Banking & Finance. In order to cope with the rise in disputes, we are continuing to focus on our timelines for dispute resolution and are staffing our divisions appropriately. However, we expect that cases may take longer to deal with due to the volume of disputes we are receiving and the time it takes for new staff to become fully trained.

Such figures are not unexpected in the context of the current global financial circumstances and weather events, with industry also experiencing a similar influx of complaints and disputes. Given that this trend is likely to continue in the short term, I would ask all financial services providers to continue to invest in staff and systems to deal with complaints and to ensure that internal dispute resolution systems respond and so minimise the number of disputes which come to us.

I would expect that consumer representatives are also seeing an upturn in complaints relating to financial services providers and urge all involved to contact the financial institution concerned in the first instance and then to contact us on 1300 78 08 08 if the complaint is not dealt with satisfactorily. Please note that there is an advocates section on our website which may be helpful to those in the consumer movement for whom the financial services external dispute resolution (EDR) sector is new.

How we can help: training and outreach programmes

The Financial Ombudsman Service is happy to help support the internal dispute resolution areas of member institutions, and consumer representatives, in any way it can. We run a range of outreach programmes including training on internal dispute resolution, conciliation and the most effective way of dealing with a dispute through the Financial Ombudsman Service. We can arrange for a Financial Ombudsman Service representative to come to you and deliver in-house training to your front line staff or legal and compliance team. If you are interested in learning more about our training, please email training@fos.org.au.

Two more EDR schemes join the Financial Ombudsman Service

On 1 January 2009, we welcomed two other dispute resolution bodies into the Financial Ombudsman Service – the Credit Union Dispute Resolution Centre (CUDRC) and the Insurance Brokers Disputes Limited (IBD). I am delighted to see that other financial services dispute resolution schemes appreciate the experience, value and scope that the Financial Ombudsman Service can offer and are joining us in developing our EDR scheme for the financial services sector. We encourage all financial services EDR schemes and companies not yet affiliated with the Financial Ombudsman Service to consider how we can build a more effective, simplified and streamlined EDR system for the financial services industry by coming together under the Financial Ombudsman Service umbrella.

We have established two new divisions to ensure that the specialist knowledge underpinning these schemes is preserved. The Mutuals division will deal with disputes about credit unions and other mutual financial services providers under substantially the same Terms of Reference as CUDRC. Philip Field, Ombudsman – Banking & Finance, has been appointed Ombudsman – Mutuals. The Insurance Broking division will consider disputes that were previously considered by IBD under substantially the same Terms of Reference. Belinda Lim, who was appointed Referee for Insurance Brokers Disputes Limited in 2008, has been appointed as the Referee of the Insurance Broking division. You can read more about these new divisions of the Financial Ombudsman Service further on in this edition of eNews.

I look forward to working closely with many of you in the coming year to ensure that alternative dispute resolution in the Australian financial services sector continues to go from strength to strength, particularly in the rapidly changing and difficult economic circumstances with which we are confronted.