FOS reduces backlog but struggling with unpaid determinations
The Financial Ombudsman Service (FOS) claims it will have eliminated its backlog of cases by the start of 2015 but was still struggling to get 22 financial services providers to pay more than $10 million in unpaid determinations.
FOS said it had eliminated the backlog of cases related to credit, deposit-taking and payment system disputes and would be expanding the process across all disputes in an effort to meet a 1 January 2015 target to be backlog-free.
In its quarterly update to industry and consumers FOS stated the moves were in response to public criticisms first raised in the 2013 independent review of FOS and the new processes of including experts earlier in the dispute process, reducing touch points within FOS and expediting some disputes where applicable had reduced the number of unallocated disputes by 536 at 30 June this year.
FOS stated that as part of the new processes it had begun a pilot program in June to tackle single-issue low-value banking and finance disputes which had resolved just under half of the 95 cases it received in its first six weeks of operations.
Full details about the overall changes FOS would be making based on last year's review and industry consultation earlier this year will be released in September with a draft revised terms of reference to be released in October ahead of a final version in December. The changes to the terms of reference will cover the changes being trialled but may also include an expansion of the jurisdiction and level of disputes that may be brought before FOS.
FOS also stated it had not made significant headway in dealing with 22 financial services providers who owed $10.157 million to consumers in relation to 105 determinations made against the providers.
Four of those cases had become the subject of legal proceedings commenced by FOS which stated the 22 providers, 105 determinations and 150 affected consumers represented a small proportion of all the cases by FOS.
However they made up 29.33 per cent of all determinations issued in the investments, life insurance and superannuation area and were related to disputes in the financial planning and advisory sector.
FOS has suggested that a limited compensation scheme of last resort may be an effective way to deal with unpaid consumer losses.
Recommended for you
With Fortnum Private Wealth and Professional Financial Services now unified under the Entireti umbrella company, CEO Neil Younger has detailed to Money Management the firm’s new direction and future expansion.
The FAAA has suggested looking offshore for overseas financial advisers to ease the adviser shortage, but are employers willing to take on the burden of workplace visas?
There may be a huge influx of alternatives coming to the market, but timing and access difficulties mean advisers can easily end up disappointed with their selection, according to Morningstar global CIO Dan Kemp.
An NSW individual has pleaded guilty to one criminal charge of providing unlicensed financial services after promoting crypto investments at national seminars.
