Snapshot. Financial Ombudsman Service Annual Review One organisation, many specialisations

Transcription

1 i Financial Ombudsman Service Annual Review One organisation, many specialisations Snapshot 19,107 new disputes were received, an increase of 33% 17,007 cases closed/resolved, an increase of 19% 3,835 effective members at 30 June 2009 Over 225 outreach/education presentations to consumers, community groups, members and industry 81 systemic issues identified and resolved Inaugural Financial Ombudsman Service National Conference held New Terms of Reference settled by Board New Board of Directors from 1 June 2009

2 Message from the Chief Ombudsman Demanding but successful year Our first year of operations as a one stop shop saw harsh economic conditions really push up demand for our services with consumers, with a 33% increase in new disputes overall coming to us in Of note is that we had a 68% increase in disputes about investments alone. Many people are doing it tough with their investments or experiencing financial hardship and we are doing all we can to help. It has also been a tough year for financial services providers as they deal with significantly increased case loads in their internal dispute resolution groups and with us. One organisation There have been many steps undertaken to ensure we have a cohesive approach to everything we do now that we are one organisation. One of the main vehicles was the creation of our new Terms of Reference that gives us a very solid foundation for the future. Many specialistions We are now drawing on the extensive skills and experience of our various predecessor schemes and staff to develop the best processes and procedures for the future. The areas in which we can use this expertise include management of systemic issues, responding to natural disasters, and exercising the core skills of dispute resolution through conciliation, negotiation, mediation and decision-making. Raising awareness We aim to continue raising awareness of our service to the Australian community, through outreach events and promotions, targetting the groups where the greatest needs lie. New Board I wish to formally welcome our new Financial Ombudsman Service Board, with Professor The Honourable Michael Lavarch as Chair of the Board. The new Board took office from 1 June 2009, taking over the reins from our previous Board who saw us through our amalgamation last year, ably led by the outgoing Chair of the Board Peter E Daly AM. Colin Neave Chief Ombudsman You can find out more about our Board at

3 Our vision To be the external dispute resolution scheme of choice for the financial services industry. Our mission To serve the community and industry by resolving disputes between consumers and financial services providers in a way people can trust. Reporting We have jurisdiction to consider a very wide range of financial products and services provided by many different types of financial services providers. To provide a logical and streamlined approach to reporting and to meet our obligations under ASIC Regulatory Guide 139, our dispute statistics are focussed on product lines. The product line framework for this annual review has been applied retrospectively to allow comparison of the year in review with the previous year s results for the same products and services handled in the predecessor schemes. The diagram below sets out our dispute product lines and the product categories connected to them. managed investments superannuation savings accounts current accounts securities safe custody derivatives /hedging investments deposit taking direct transfer general/ domestic Financial Ombudsman Service payment systems non-cash life small business/ farm professional indemnity extended warranty consumer credit credit margin loans business finance guarantees For more information linking these products to the financial services providers who sell them, see our full annual review at

4 Key statistics Calls Our call centre received 236,378 calls during the year, up 6% on New disputes New disputes overall 25,000 22,392 3,285 20,000 19,107 14,359 15,000 10,000 5,000 We received 19,107 new disputes during the year, up 33% on The total dispute figure does not include the 3,285 disputes still in registration at 30 June Registration is a new process we began trialing in March When a dispute comes to us, we register it with the financial services provider it relates to within one working day. We also advise the consumer that we have contacted the financial services provider about the dispute. The aim of this process is to promote further contact and encourage a resolution between the consumer and the financial services provider. disputes in registration 1/07/ /06/2009 1/07/ /06/2008 For more information on the registration process, see our full annual review at New disputes by product line The table below sets out how those disputes were spread across product lines. Product line 1/07/ /06/2009 Percentage difference* 1/07/ /06/2008 Credit 6,731 36% 4,944 Insurance 6,406 34% 4,798 Investments 1,540 68% 916 Deposit taking 1,293 19% 1,590 Payment systems 1,474 8% 1,365 Outside TOR products % 477 Other products % 269 Total disputes received 19,107 14,359 * rounding of some figures has taken place For more information on disputes by product line, see our full annual review at

5 What disputes were about The chart below sets out the main issues raised in the disputes we received. Disclosure 4% Other 5% Advice 7% Privacy 2% Financial services provider decision 41% Transaction 10% Charges 12% Service 19% Disputes we resolved We resolved/closed 17,007 disputes, compared to 14,333 in These disputes were resolved using a flexible approach to resolution, including: negotiation between parties conciliation conferences, and determinations and adjudications. Systemic issues Systemic issues are those that we identify that may have affected, or have the potential to affect, a number of customers beyond the parties to a dispute. 81 definite systemic issues were identified and resolved this year, falling into the following broad categories: disclosure in relation to the operation of an account or facility inappropriate or misleading disclosure computer programming and human errors contract and calculation errors conduct contravening legal codes, and internal/external dispute resolution license obligations. For more information on systemic issues, see our full annual review at

6 Community and industry involvement During the year, we delivered over 225 presentations across the country to a variety of audiences. Some presentations focused on what services we offer and how we operate, others dealt with more specific issues such as financial hardship and home loans. Our work also extended to supporting victims of the Victorian bushfires and investors affected by the global financial crisis. Community/consumer We presented to community-based groups at seminars, conferences, workshops and trade fairs with an emphasis on promoting the availability of services of the Financial Ombudsman Service when consumers cannot resolve an issue with their financial services provider. Specific programs were conducted for seniors, youth, indigenous groups, migrants and those facing financial difficulties. Of particular importance was building connections with community groups through our involvement in industry based conferences. Members/industry We liaised extensively with financial services providers and industry bodies during the year. Information sessions on a variety of different issues were held. We delivered numerous presentations at industry conferences and conducted interactive sessions with financial services providers such as the General Insurance Open Forum. We continued to offer our popular internal dispute resolution training workshops. Attracting over 400 delegates, our inaugural national conference provided important insights into the financial services industry and the implications for dispute resolution in Australia. Submissions We also made submissions to inquiries, reviews and issues papers including the: Standing Committee of Officials of Consumer Affairs consultation paper The Australian Consumer Law Australian Securities and Investments Commission s Consultation Paper 102, on the review of regulatory guides relating to dispute resolution Ministerial Council on Consumer Affairs consultation paper Responsible Lending Practices in relation to Consumer Credit Cards National Alternative Dispute Resolution Advisory Council s issues paper Alternative Dispute Resolution in the Civil Justice System, and Administrative Review Council s report Administrative Accountability in Business Areas subject to Complex Regulation. Contacting us Telephone * Fax (03) Web info@fos.org.au Mail GPO Box 3 Melbourne Vic 3001 * 9am 5pm AEST. Calls will be charged for the cost of a local call from landlines. Calls from mobile phones will be charged at the applicable rate from your carrier. Financial Ombudsman Service Limited ABN