One-stop shop to help consumers
CONSUMERS in dispute with financial service providers have a one-stop shop after the launch of the national Financial Ombudsman Service.
CONSUMERS in dispute with financial service providers have a one-stop shop after the launch of the national Financial Ombudsman Service.The service has been established to resolve complaints involving banking, finance, insurance and superannuation, and merges three dispute resolution bodies.Companies in the financial services sector will be able to sign up to be covered by the ombudsman, with the service free to consumers.Launching the service, Minister for Superannuation and Corporate Law Nick Sherry said the body's independence was important and it should not become a consumer advocacy service."It's got to be able to independently adjudicate on disputes," he said. "I think the danger of moving into consumer advocacy is that it could lose a perception of independence. It would have to be careful about that."The service will cover about 80% of financial disputes, with most of the rest being state-regulated issues that will be transferred to the Commonwealth under a recent Council of Australian Governments agreement.Among services being transferred are the regulation of mortgages and payday lenders.Senator Sherry said he expected the transfer to be complete by the end of this year and the new regulatory regime - which is likely to lead to the services being covered by the new ombudsman - to be in place by the end of next year.The decision to centralise consumer credit protection would help protect Australia from US-style subprime lending by Australia's approximately 12,000 mortgage brokers, Senator Sherry said."One of the critical weaknesses identified in the US subprime was the unfortunate lack of regulation and the dispersal of what regulation there was . of mortgage broking."Consumer groups welcomed the new office, saying it would make cost-effective dispute resolution accessible to more consumers."Industry-based external dispute resolution is one of the great success stories of consumer protection in the last 20 years," Consumers Federation of Australia chairwoman Catriona Lowe said."It provides critical access to justice to large numbers of consumers as well as important feedback to industry members about consumer concerns."The chief ombudsman will be Colin Neave, formerly the banking ombudsman. Mr Neave said the simplified structure would suit consumers.LINK? www.fox.org.au