Skip to content
Archive

Record dispute number in final year of FOS

17 September 2018, 14:00 PM

The Financial Ombudsman Service (FOS) Australia received record dispute numbers in 2017-18, according to the Annual Review, published today.

FOS received 43,684 disputes in 2017-18. This was an 11% increase from last year, following a 16% increase from 2015-16.

The increase in 2017-18 was driven by growing dispute numbers in all categories, especially later in the year. The unprecedented dispute numbers may be explained by increased awareness of FOS due to our community outreach activities over several years, attention on the sector brought about by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and public debate about the future of external dispute resolution.

What the disputes were about

We accepted 22,962 disputes into Case Management in 2017-18. This was 2% more than last year.

Type of disputes

No. of disputes

2017-18

Change from

2016-17 (%)

Percentage of disputes 2017-18

Credit

11,295

3

43

General insurance

8,603

-2

32

Deposit taking

2,195

18

8

Payment systems

1,656

24

6

Investments and advice

1,524

18

6

Life insurance

1,117

10

4

 

Across all these disputes, the main products in dispute were credit cards (15% of all disputes), home loans (10%) and motor vehicle – comprehensive insurance (10%). The main issues were denial of claim (8%), claim amount (7%) and failure to follow instructions/agreement (7%). Of all these disputes, banks were involved in 43%, general insurers 28% and credit providers 9%.

Resolving disputes quickly and efficiently

The average time to close disputes was 54 days (the same as last year). We closed almost half (48%) the disputes lodged with us within 30 days (up 4 percentage points from last year) and 80% of disputes within 60 days (78% last year).

A key focus again has been on systemic issues. We identified and referred 306 possible systemic issues to financial firms for response and resolved 91 definite systemic issues. More than 295,000 customers were estimated to have been affected by the systemic issues we investigated.

We continued helping people to understand and use our service, strengthening partnerships especially with consumer representatives, sharing our dispute experience with members, and supporting people in challenging circumstances.

Smooth transition to new dispute scheme

This Annual Review is the last one for FOS. From 1 November 2018, a single financial services dispute resolution scheme, the Australian Financial Complaints Authority (AFCA), will begin receiving disputes. AFCA replaces FOS, the Credit and Investments Ombudsman (CIO) and Superannuation Complaints Tribunal (SCT).

In 2017-18, we initiated a comprehensive work program to help ensure a smooth transition to AFCA and established a joint working group with the SCT to examine the best ways for superannuation disputes to be managed under the new scheme.

Links: FOS Annual Review
           FOS Annual Review snapshot (540 KB)