The federal government has released the terms of reference for the independent review into the financial system’s external dispute resolution and complaints framework.
The independent expert panel consisting of Professor Ian Ramsay (chair), Julie Abramson and Alan Kirkland and will examine the Financial Ombudsman Service (FOS), the Superannuation Complaints Tribunal, and the Credit and Investments Ombudsman to ensure that they’re working effectively to meet the needs of consumers and industry.
The review will have regard to efficiency, equity, complexity, transparency, accountability, comparability of outcomes and regulatory costs.
“The terms of reference also allow for comprehensive consideration of the effectiveness of the existing framework, as well as consideration of different models in providing effective avenues for resolving disputes,” said Minister for Revenue and Financial Services, Kelly O’Dwyer.
“The Turnbull Government is committed to ensuring the three bodies are working effectively to meet the needs of users.”
The panel requested a three month extension and will now provide a report to the government by the end of March 2017.
“The additional time will allow for in-depth consultation with stakeholders, industry, the dispute resolution and complaints schemes, peak bodies, and regional and consumer representatives.
“This review builds on the government’s response to the Financial System Inquiry which sets out a suite of policies to improve Australia’s financial system,” O’Dwyer said.
The review will make recommendations on:
The role, powers, governance and funding arrangements of the dispute resolution and complaints framework in providing effective complaints handling processes for users, including linkages with internal dispute resolution
The extent of gaps and overlaps between each of the bodies (including consideration of legislative limits on the matters each body can consider) and their impacts on the effectiveness, utility and comparability of outcomes for users
The role of the bodies in working with government, regulators, consumers, industry and other stakeholders to improve the legal and regulatory framework to deliver better outcomes for users, and
The relative merits, and any issues that would need to be considered (including implementation considerations), of different models in providing effective avenues for resolving disputes
In making its recommendations the review can take into account best practice developments from international dispute resolution arrangements and other sectors and will consult with ASIC on the concurrent review of the FOS’s small business jurisdiction.
The review also has the ability to make observations, but not recommendations, on the establishment of a statutory compensation scheme of last resort.
The FOS has welcomed the release of formal terms of reference and has endorsed the work of the independent expert panel and key considerations guiding the review.
Chief ombudsman Shane Tregillis said: “FOS is committed to the principles of fair, open and simple resolution of financial disputes. Reducing complexity for consumers in accessing effective independent dispute resolution has the strong support of FOS.”
Tregillis further welcomed the ability of the panel to make observations on a compensation scheme of last resort.
“FOS has been a longstanding advocate of a compensation scheme over many years. It is essential for the effective operation of external dispute resolution that consumers who get an award of compensation by FOS can be confident that this compensation will be paid.” Tregillis
