Financial Ombudsman Service (Australia)

This article is about the Financial Ombudsman Service in Australia. For the UK Financial Ombudsman Service, see Financial Ombudsman Service.
Financial Ombudsman Service
Predecessor Financial Industry Complaints Service, Banking and Financial Services Ombudsman
Formation 1 July 2008 (2008-07-01)
Type Ombudsman
Headquarters Melbourne
Location
  • Australia
Membership
Australian Financial Companies
Chief Ombudsman
 Shane Tregillis
Affiliations approved by the Australian Securities and Investment Commission
Staff
315 full-time equivalent
Website www.fos.org.au

The Financial Ombudsman Service (FOS) is a private company limited by guarantee,[1] Financial Ombudsman Service Ltd, providing an external dispute resolution service for the financial services industry. It is currently approved by the Australian Securities and Investment Commission (ASIC) in accordance with Regulatory Guide 139.[2]

History

FOS was established on 1 July 2008 following the merger of the Financial Industry Complaints Service (FICS) with the Banking and Financial Services Ombudsman (BFSO) and Insurance Ombudsman Service (IOS); all of which were Industry Self-Regulatory bodies.[3]

In 2015 a complaint was raised in Submission 134 to the Senate committee on the scrutiny of financial advice concerning six conversations between the Ombudsman and a consumer’s representative, who had recorded the telephone conversation. Submission 134 makes it clear that there are differences between the telephone recordings and the working notes of those conversations made by the Ombudsman.

Thereafter the Ombudsman was reported by media as having confirmed "the decision to refer the matter to a court given the complexity of the dispute, the inability of FOS to cross examine all relevant witnesses and compel the production of information from third parties, as well as the need to engage experts",[4] even though in recordings of the conversations the same Ombudsman said the only reason to dismiss the complaint was lack of staff, that the complaint had merit and that if FOS had staff they would have ruled the dispute inside jurisdiction.[5][6] It was this decision that subsequently resulted in the court proceedings to challenge the jurisdictional decision of FOS not to handle the particular complaint.

ASIC are yet to respond to the questions and, since the filing, other senators have called for FOS to explain the circumstances. ASIC did appear before the Joint Committee on Corporations and Financial Services on 16 March, where it stated that the Court dealt ith the issue of the misleading file notes.[7] However, the court itself stated in its judgment that it did not examine any issues beyond the actual decision of FOS itself, thus it did not examine any materials (including the file notes and the recordings), nor did it dealt with any allegations of misconduct.[8] FOS did release a media statement attempting to dismiss the allegations and rely on the ruling by the court.[9] However, this statement does not address the substance of the allegations in the submission which concern misleading file notes being presented in the discovery phase of a trial.[10]

The Law Council of Australia has issued no comment given that the person who is the subject of the allegations, Dr. Justijana Tonti-Filippini has held the position of deputy chair of the financial services committee for the business section of the Law Council of Australia. There has been no action taken by the Victorian Legal Services Commissioner despite the individual being named as a person admitted to practice in Victoria. As a party to the case, which would have benefited, the Australia and New Zealand Banking Group has not commented on the case.

Subsequently there have been continued calls by a number of Australian Senators including Senator Nick Xenophon for the FOS to be disbanded and replaced with a government funded body.[11][12][13]

Despite the FOS have been criticised, consumer advocacy groups such as CHOICE and ASIC, are generally supportive of FOS, stating that, "while there is room for improvement, the Financial Ombudsman Service is providing an essential service of a high standard."[14][15] Furthermore ASIC have continued to support FOS as an 'approved EDR scheme'.[16] In November 2016 FOS disavowed responsibility to enforce its rulings, effectively forcing consumers to seek formal Court based enforcement proceedings and thus moving against the role of FOS as an informal method of consumer redress.[17]

In 2016 the government announced a review into Australia's EDR schemes for the financial system, including FOS.[18] However, in November 2016, a Lower House parliamentary committee, which has a majority of incumbent government MPs, concluded that FOS should be replaced.[19] The outcome of the EDR review is expected in March 2017.

See also

References

  1. ↑ Tim Griffiths and Jacqui Mitchell (2012). "Financial Ombudsman Service: Dr Jekyll or Mr Hyde?". (2012) 27(9) ILB 130.
  2. ↑ Corporations Act 2001 (Cth) s 912A
  3. ↑ "ASIC-approved dispute resolution schemes | ASIC - Australian Securities and Investments Commission". asic.gov.au. Retrieved 2015-10-02.
  4. ↑ Media, WorkDay. "Australian Banking and Finance News from Banking Day". www.bankingday.com. Retrieved 2016-04-07.
  5. ↑ "The questions the Financial Ombudsman needs to answer". ABC News. 2016-04-01. Retrieved 2016-06-11.
  6. ↑ "Calls for Financial Ombudsman Service to be disbanded over credibility issues". ABC News. 2016-03-16. Retrieved 2016-06-11.
  7. ↑ Joint Committee on Corporations and Financial Services, Hansard (16 March 2016), see comments of Mr. Peter Kell, Mr. Warren Day and Mr. Greg Medcraft.
  8. ↑ Goldie Marketing Pty Ltd v Financial Ombudsman Services [2015] VSC 292 (19 June 2015) at para. [83] available at http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/vic/VSC/2015/292.html
  9. ↑ "Financial Ombudsman Service decision supported by Court :: Financial Ombudsman Service". fos.org.au. Retrieved 2016-04-02.
  10. ↑ "The questions the Financial Ombudsman needs to answer". ABC News. 2016-04-01. Retrieved 2016-06-11.
  11. ↑ "Calls for Financial Ombudsman Service to be disbanded over credibility issues". ABC News. Retrieved 2016-03-17.
  12. ↑ "The questions the Financial Ombudsman needs to answer". ABC News. Retrieved 2016-04-02.
  13. ↑ "Financial Ombudsman Service under fire as politicians demand change". 2016-03-17. Retrieved 2016-04-02.
  14. ↑ "Joint submission: Independent Review of the Financial Ombudsman Service - Consumer Action". Consumer Action. 2013-10-29. Retrieved 2016-05-26.
  15. ↑ https://www.choice.com.au/shopping/consumer-rights-and-advice/taking-action-and-making-a-complaint/articles/how-ombudsman-services-can-help-you. Missing or empty |title= (help)
  16. ↑ http://asic.gov.au/regulatory-resources/financial-services/dispute-resolution/asic-approved-dispute-resolution-schemes/. Missing or empty |title= (help)
  17. ↑ "Chasing Down Wrongdoers is Not Our Job: FOS".
  18. ↑ "Review of external dispute resolution and complaints scheme".
  19. ↑ "Parliamentary Committee Calls for Banking Tribunal after Inquiry".

External links

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