FOS seeking input on limits to compensation and jurisdiction
The Financial Ombudsman Service (FOS) has released a consultation paper in which it will seek input about raising the limit at which it can hear disputes between members of the public and financial services providers.
At present, under the regulations which had established FOS, it can adjudicate on claims of up to $500,000 with that figure set in 2002 as the point in which the price of a financial product moves it beyond what is considered a retail financial product.
In releasing the consultation paper FOS stated that this figure has not moved since that time but that it would now consult with industry following recommendations from the recent Senate Economics References Committee report into the performance of the Australian Securities and Investments Commission.
FOS said the report recommended an increase in the current jurisdictional limits and in increase in the cap on the maximum compensation that can be awarded as well as the indexing of these limits. At present the highest cap is $280,000 per single claim which is indexed every three years but does not include indexation of the jurisdiction limit
FOS stated it would seek comment on the adequacy of the current monetary limits and compensation caps and what changes should be applied if they are considered necessary.
It also stated that if it was to increase the jurisdictional limit in any way it would require ASIC approval, the possible amendment of regulations and an examination of the flow on effects for the jurisdiction of all ASIC-approved external dispute resolution schemes.
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