FOS supports proposals for a single scheme for financial, credit, investments and insurance disputes to simplify, strengthen and increase access to free external dispute resolution for consumers and small businesses.
In its latest submission to the Ramsay Review, FOS has provided detailed analysis that shows current claims limits and compensation caps for consumers and small business are outdated and need to be significantly increased. FOS also recommends that there no longer be a distinction between claims limits and compensation caps, in order to reduce complexity for consumers and financial services providers alike.
“FOS has undertaken financial modelling to determine more realistic monetary and compensation limits for general consumer disputes. We have looked at increases in key variables relevant to both FOS’s disputes and general economic indicators,” said Chief Ombudsman, Shane Tregillis.
“This results in a consumer compensation range of $625,000 to $955,000 across different variables. FOS supports an increase at the upper end to future proof the system.
“We also analysed available data on small business lending from a range of different perspectives. Our analysis supports a broader small business jurisdiction that would allow small businesses the opportunity to bring a dispute to FOS in relation to a credit facility of up to $5m in value and have access to compensation of at least $1million. We believe this limit would capture at least 98% of all small business lending disputes.”
FOS also welcomes the announcement by the Minister for Revenue and Financial Services, Hon Kelly O'Dwyer MP, to extend the Ramsay Review’s Terms of Reference to include firm recommendations on the establishment and potential design of a compensation scheme of last resort.
“Implementation of the Ramsay Review recommendations as an integrated package of measures will greatly enhance fairness, openness, simplicity and adaptability in external dispute resolution.
We look forward to the final report by the Ramsay Panel and working on implementation of these significant reforms with key stakeholders,” added Mr Tregillis.
Virginia Wallace, 03 9613 7470 firstname.lastname@example.org