THE NATIONAL Financial Ombudsman Service launched last week will handle dispute resolution services covering an estimated 80 per cent of Australian banking, insurance and investment disputes.
The FOS was launched on 10 July by Nick Sherry, Minister for Superannuation and Corporate Law, at its national headquarters in Melbourne.
Chief Ombudsman Colin Neave said the merger was a response to the growing number of disputes across multiple sectors of the financial services industry.
“There are a lot of disputes these days that cross boundaries, where you have a banking product sold in conjunction with other financial services products. Having a one-stop shop where a dispute arises is good for consumers as well as our members.”
Neave believes the service is a case in point for proponents of a self-regulatory regime for the financial services industry — a major initiative of the former coalition government.
“I think the overall comment that needs to be made is that this is an excellent example of the financial services industry working with those representatives of the consumer interest to support a service such as this one,” Neave said.
The new scheme will consolidate services provided by the three major financial services ombudsmen — the Banking and Financial Services Ombudsman (BFSO), the Insurance Ombudsman Service (IOS) and the Financial Industry Complaints Service (FICS).
The service is free to consumers, thanks to private funding through membership fees and levies. According to Neave, the organisation has more than 3000 members from across the financial services industry, most of whom have already transferred their membership to the new scheme.
Members are charged according to the level at which a dispute is closed and the time and complexity of the case.
The integration of the three units has been under way for some time, with joint systems operating for the past four years including a joint call centre. Neave will now be charged with the task of fully integrating their existing operations.
“The three individual organisations have all grown up with their own terms of reference and procedures,” Neave said. “The major project we have over the next 18 months is to develop common terms of reference for the organisation and common processes and procedures,” he said.
Neave said his other big task would be to uphold the trust placed in the organisation by both its members and consumers.
“That trust comes from predictability and quality in our decision-makers and decision-making, and I’m very confident that this will continue,” he said.