A one-stop-shop external dispute resolution (EDR) approach would simplify the process, the Australian Bankers’ Association (ABA) believes.
In a submission to the Independent Expert Panel’s review of the financial system EDR framework, the ABA said giving more people easier access to have complaints heard outside their bank was important to protect customer interests.
It said where more than one EDR scheme was in operation there should be a single or simple path to EDR through an overarching gatekeeper, or ensured clarity for consumers to be directed on where to access EDR to resolve a dispute.
ABA executive director for retail policy, Diane Tate, said EDR was an important alternative to courts and to meet its purpose it should be easy for consumers to know where to go to get their problem resolved if they had not been able to do so with their bank or other financial institutions.
“The ABA also supports expanding access so consumers can bring disputes up to the value of $1 million, and compensation can be awarded also up to $1 million,” Tate said.
To help build confidence in the financial advice industry, and as part of the professionalisation of financial advice, the ABA supported the setup of a new compensation scheme.
“This would be a mandatory, prospective compensation scheme that covers consumers who have received poor financial advice, but haven’t been paid compensation awarded by an ASIC [Australian Securities and Investments Commission]-approved external dispute resolution scheme because the financial adviser is no longer in business. This scheme would be available when no other redress avenues are possible.”
