Financial services provider charging clients for FOS costs
The Financial Ombudsman Service said it has identified a systemic issue at a financial services provider where legal costs have been erroneously charged to a customer's account.
After investigating a dispute where the applicant claimed the FSP had not adequately explained the legal and enforcement fees it had asked the applicant to pay to bring his home loan up to date, FOS discovered the FSP had levied charges against the applicant for services performed by solicitors the FSP had engaged.
The FOS dispute resolution service is free for applicants and paid for by FSPs.
In this case outlined in the latest edition of the FOS Circular, FOS said it identified other instances where legal costs had erroneously been charged to a customer's loan account.
After reviewing the information provided FOS determined the issue to be systemic at the FSP, and then requested that all costs erroneously charged to the affected customers be refunded in full, together with interest payable at the relevant loan rate.
The FSP was also asked to remind its lawyers of its dispute management policy, with specific reference to the fact that FOS is a free service for consumers and that lawyers should produce separate invoices for legal costs relating to disputes lodged with FOS to reduce the likelihood of similar errors occurring in future, FOS stated.
Recommended for you
The Australian Financial Complaints Authority has reported an 18 per cent increase in investment and advice complaints received in the financial year 2025, rebounding from the previous year’s 26 per cent dip.
EY has broken down which uses of artificial intelligence are presenting the most benefits for wealth managers as well as whether it will impact employee headcounts.
Advice licensee Sequoia Financial Group has promoted Sophie Chen as an executive director, following her work on the firm’s Asia Pacific strategy.
The former licensee of Anthony Del Vecchio, a Melbourne adviser sentenced for a $4.5 million theft, has seen its AFSL cancelled by ASIC after a payment by the Compensation Scheme of Last Resort.
