There are concerns the Government is going to miss an opportunity to make it easier for consumers to complain to a dispute resolution body if they have a problem with their bank, insurer, mortgage broker or other financial service provider.

The Insurance and Financial Services Ombudsman (IFSO) Scheme and the Citizens Advice Bureau have raised concerns around the fact there are four organisations dealing with financial services disputes.

While all providers of financial advice to retail consumers need to join a dispute resolution scheme, they can choose which scheme they want to be part of.

This means that if a consumer wants to make a complaint, they can only do so through the scheme their provider is a fee-paying member of.

While banks are part of the Banking Ombudsman Scheme (BOS), the IFSO Scheme, Financial Services Complaints Ltd (FSCL) and Financial Dispute Resolution Service (FDRS) all compete to attract members from elsewhere in the financial services sector.

The Citizens Advice Bureau maintains one of the factors dispute resolution schemes compete on is being “business friendly”.

Speaking at a select committee on the Financial Services Legislation Amendment Bill on May 3, the organisation’s deputy CEO Andrew Hubbard said members could shop around for the scheme they believed was the least consumer friendly.

Speaking to interest.co.nz, the Insurance and Financial Services Ombudsman Karen Stevens said she wasn’t aware of schemes being biased in any way. The problem in her view, is that there could be a perception of this being the case.

Yet without evidence of competition causing problems, the Government has taken the matter off the table as it’s introduced the Financial Services Legislation Amendment Bill to Parliament, as a part of a revamp of New Zealand's financial advice regime.

 

 - Interest.co.nz

Posted in Personal Finance, Jenée Tibshraeny