Continuing our reporting on the issue of some consumers not receiving compensation from financial services providers (FSPs) following FOS determinations, this article provides an update on the number of unpaid FOS determinations issued under the single FOS Terms of Reference.
Since 1 January 2010:
- 32 FSPs have been unwilling or unable to comply with 137 FOS determinations made in favour of approximately 194 consumers.
- The value of the outstanding amounts awarded by these determinations was $12,611,859.05 plus interest as at 31 March 2016.
- Inclusive of the interest awarded by the decision-maker and adjusted for inflation over time on a simplified per annum basis, the real value of this uncompensated loss is $16,625,930.56.
Although there has been a new FSP added to the non-compliance list in the last quarter, two of the FSPs who were on the list have now complied with the relevant determinations in full. This was achieved in one case through FOS seeking enforcement through the courts and in the other through protracted engagement with the relevant FSP.
While this is pleasing, we continue to seek compliance from several FSPs who are currently overdue to meet awards under adverse determinations. However, we are hopeful that further dialogue with these FSPs will result in their compliance and so we are not yet reporting issues as serious misconduct (the criteria for inclusion in this reporting).
Only a very small percentage of all FOS members are involved, and these figures represent only a small proportion of all the awards we issue across all our jurisdictions in banking, insurance, life insurance and investments.
However, despite the small number of FSPs involved, unpaid determinations represent 19.60% of all accepted determinations issued in favour of consumers in the Investments and Advice (I&A) area. 56% of the non-compliance relates to disputes in the financial planning and advisory sector.