There has been a lot of media coverage again lately about Australian financial services, with the release of the interim report of the Financial System Inquiry (the Murray Inquiry), the Senate Inquiry into the Performance of the Australian Securities and Investments Commission, and the response of the Commonwealth Bank of Australia into issues associated with the provision of financial advice.
I welcome the emphasis the interim report of the Murray Inquiry has given to the importance of consumers and other users being able to trust and have confidence in the financial system. This appears to be a key theme that has informed the wide-ranging issues canvassed in the interim report, and is consistent with the views FOS set out in our submission to the Inquiry.
By providing an accessible and effective mechanism for consumers to resolve disputes, FOS plays an important part in helping build trust in financial services.
The Inquiry’s interim report canvasses the concerns expressed by FOS and others that current compensation arrangements are not adequate to provide redress to consumers who have suffered financial loss. It also canvasses some of the issues about the sufficiency of relying on professional indemnity insurance as a compensation mechanism. The Inquiry has called for more information on these issues, and FOS is currently considering what further information we can provide in response to this request.
As part of our role we believe it is important to share our dispute resolution experience. In this issue of the Circular we have published the FOS Approach to Responsible Lending series, a collection of four documents that explain how we deal with disputes where it is alleged that it was inappropriate for the financial services provider to have lent money to a consumer. We have also reissued information for consumers on getting the most from financial advisers.
In this issue we also respond to some of the commentary around the recent decision in Financial Ombudsman Service Limited v Pioneer Credit Acquisition Services Pty Ltd  VSC 172. Since the decision was handed down on 16 April 2014, there has been commentary that seems to imply FOS does not pay regard to legal principles in its determinations. However, as is clear from the actual reasons in the decision, this was not the evidence given by FOS or the conclusions reached by the judge in this case.
You can also read updates on our initiatives to reduce our backlog and improve our processes, and an update on unpaid FOS determinations.
We will soon be releasing our 2014-2015 Business Plan. The plan will be available on our website in mid-August.
As always, if you have comments or suggestions about anything you read in the Circular, please let us know at email@example.com.