Govt will pay unpaid FOS determinations
The Government delivered few financial services surprises in the Federal Budget, but did announce that it would be providing $30.7 million to pay compensation to consumers who have been victims of unpaid Financial Ombudsman Service (FOS) determinations.
The Government had committed to the introduction of an industry funded compensation scheme of last resort, but the Treasurer, Josh Frydenberg, went further in the Budget with respect to the Commonwealth funding the unpaid determinations.
“The Government is committed to ensuring consumers and small businesses affected by misconduct have access to redress,” the Budget documents said.
“The Government established the Australian Financial Complaints Authority (AFCA) last November: a one‑stop shop for free, fast and binding dispute resolution. The Government will provide $2.8 million for AFCA to establish a historical redress scheme for eligible financial complaints dating back to 1 January 2008 (the timeframe adopted by the Royal Commission).”
“The Government will provide $30.7 million to pay compensation owed to consumers and small businesses from legacy unpaid external dispute resolution determinations.”
It said it had committed to an industry‑funded compensation scheme of last resort and would provide $2.1 million to Treasury and $0.5 million to AFCA to establish the scheme.
Recommended for you
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.
