The West Australian, YOURMONEY, 12.9.16:
The Financial Ombudsman Service is proving to be a handy resource for Australians trying to get banks, insurers, investment managers and financial planners to take their complaints seriously.
The number of disputes received by the Federal service has surged more than 7 per cent to 34,095 over the past financial year, with the biggest rise coming in complaints about general insurance and consumer credit continuing to be the major problem.
Yet more than 12,000 of these complaints were sorted out before they even got to being seriously examined by the FOS, which last year changed its processes for accepting matters to resolve.
In the 2014-15 financial year, a relatively modest 8645 complaints were quickly sorted out.
FOS is the major dispute resolution body that banks, financial planning firms, insurance companies and brokers must provide under laws requiring financial services firms to offer internal and external means of dealing with customer complaints.
It deals with everything from complaints about poor or dodgy financial advice around investment of life savings down to disputes when financiers take a hard line on problem personal loans.
Chief Ombudsman Shane Tregillis said all disputes related to financial difficulty were now referred back to the financial services provider to give the parties another opportunity to resolve their row. “Before these changes, these disputes may have progressed directly to FOS,” Mr Tregillis said.
Most providers have internal processes and people to deal with customer complaints about products or services, but many customers can be unaware of the processes and lack trust in the ability of organisations to fix wrongs internally.
FOS now insists that financial service providers get the opportunity to resolve the dispute if the peeved client has not already asked the company to resolve it internally.
According to the FOS annual report published last week, the number of disputes lodged about investment and advice slipped 4 per cent to 1517 in 2015-16 and life insurance complaints also slid 4 per cent to 1365.
Yet 376 of the investment and advice rows were sorted out before moving on to the formal disputes resolution phase, while a quick peace pipe was smoked on 270 life insurance matters.
With just under half of the 34,000-plus gripes reported to FOS relating to consumer credit, it has introduced a fast-track process for simpler and low-value disputes that gets an adjudicator involved early.
The agency uses a multi-stage approach, usually allowing a company up to 45 days to give a written response to a complaint received directly from a customer.
If a client lodges a dispute with FOS after receiving a written response from the company, the FOS will tell the company and give it another 21 days to sort it out.