Financial Counsellors Support Merger of FOS and CIO
30th November 2016 – Financial counsellors – who help hundreds of Australians with financial services disputes each year – have provided overwhelming support for the merger of the Financial Ombudsman Service and the Credit & Investments Ombudsman into a one stop financial complaints ombudsman service.
Seventy-five percent of financial counsellors that responded to a survey by Financial Counselling Australia supported a merged ombudsman service. (See the one page infographic here)
FCA conducted the survey to inform the joint consumer submission to the current review of external dispute resolution schemes (the Ramsay review).
Financial counsellors were also asked to rate their experience with FOS and CIO in the past 12 months on a scale of 1 – 10, where 1 was really bad and 10 was really good. FOS received higher ratings compared to the CIO, with a weighted average ranking of 7.8 for FOS versus 5.8 for the CIO. Many financial counsellors had not interacted with CIO however and did not provide a rating.
A common theme in the comments from financial counsellors was that it was confusing to have two schemes and that a one-stop shop made sense. There were concerns however that any merger should be about genuine benefits and not just a cost-cutting exercise.
No financial counsellor suggested that competition between external dispute resolution schemes was a good thing, which has been one of the main arguments put by those advocating for the status quo.
While competition between financial services providers is to be encouraged it does not make sense when applied to dispute resolution schemes, which are free, accessible alternatives to the courts. The existence of “competition” between schemes can in fact be detrimental, leading to forum shopping and raising concerns about bias.
FCA and the seven other consumer groups involved in the joint consumer submission to the Ramsay review, have been very clear, for many years now, about the benefits of a single ombudsman for financial services complaints. This is already the case in telecommunications and in State-based energy and water ombudsman schemes.
A one page infographic of the survey results is available here and the fuller report is here.
Media comment: Fiona Guthrie, CEO, 0402 426 835
[email protected]