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 July 1, 2008
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 company providing an external dispute resolution service for the financial services industry. It is approved by the Australian Securities and Investment Commission (ASIC).

FOS provides free, impartial and accessible services to consumers, including some small businesses, who are unable to resolve disputes with financial services providers that are members of the scheme. Membership is compulsory for most financial service providers. However membership is open to any financial services provider carrying on business in Australia, including providers not required to join an external dispute resolution scheme. Over 16,800 Australian financial services providers are members of scheme.

The service is free to consumers as costs are met by the scheme members and is an alternative to going to court to lodge a dispute.

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). The Credit Union Dispute Resolution Service and Insurance Brokers Disputes Ltd joined FOS in January 2009. FOS and its predecessor schemes have over 20 years’ experience providing dispute resolution services in the financial services sector. Rising numbers of households in financial difficulty, the natural disasters that have struck Australia in recent years, the ongoing impact of the global financial crisis and a growing awareness of FOS in the community have all contributed to a steady increase in the number of disputes FOS has received since it began operating.

Overview

The Financial Ombudsman Service (FOS) provides specialised services in dispute resolution, systemic issues management and code monitoring.

FOS is a not-for-profit external dispute resolution (EDR) scheme that provides free, fair and accessible services to consumers (including some small businesses) who are unable to resolve disputes with financial services providers that are members of FOS.

Membership of FOS is open to any financial services provider carrying on business in Australia, including providers not required to join an external dispute resolution scheme approved by ASIC.

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). The Credit Union Dispute Resolution Service and Insurance Brokers Disputes Ltd joined FOS in January 2009. FOS and its predecessor schemes have over 20 years’ experience providing dispute resolution services in the financial services sector.

FOS is funded by its members, which are financial services providers that have chosen us as their external dispute resolution scheme. A significant proportion of FOS funding comes from case fees. The fees paid by an FSP reflect the number of disputes it is involved in and the stages they progress.

Membership include banks, credit unions, building societies, general and life insurance companies and brokers, superannuation providers, fund managers, mortgage and finance brokers, financial planners, stockbrokers, investment managers, friendly societies, time share operators, credit providers and authorised credit representatives. The FOS home page provides a list of FOS members.

FOS can only consider disputes involving its members. Every business with an Australian financial services licence or an Australian credit licence must be a member of an external dispute resolution scheme approved by the Australian Securities and Investment Commission (ASIC).

FOS members are split into two types: licensees and authorised credit representatives (ACRs). Licensees hold an Australian financial services licence or a credit licence from ASIC. ACRs are businesses that represent a credit licensee. FOS refers complaints it receives from a customer of an ACR to its licensee’s dispute resolution area.

Areas covered

FOS deals with complaints consumers have with financial matters which fall into the following categories:

Complaints Process

FOS only consider a complaint after the member financial services provider (FSP) has had a chance to resolve it with their customer.

Number of disputes resolved in 2011-2012

The number of disputes FOS has resolved each year has risen steadily since it began operation of 1 July 2008. FOS accepted 25,298 disputes in 2011-2012, and resolved 24,983 accepted disputes. In 2011/12, 74% of accepted disputes were resolved by agreement between the applicant (the person or small business who lodged the dispute) and the FSP. This was a 3% increase on the previous year.The percentage of disputes resolved through a FOS decision – because an agreement could not be reached – fell from 10% to 8%.

Staff

FOS employs around 315 full-time equivalent (FTE) staff. The organisation is led by Chief Ombudsman Shane Tregillis.

Governance

FOS is governed by an independent board of consumer representatives and financial services industry representatives. The role of the Board is to monitor the performance of FOS, provide direction to the Ombudsman on policy matters, set the budget and review from time to time, the Terms of Reference including the jurisdictional limits of the Ombudsman. The Board does not get involved in the detail of cases which come before the Ombudsman as that would prejudice the independence of the Ombudsman. The decisions of the Ombudsman are independent of any interference from the Board. The Board is chaired by the Professor Hon. Michael Lavarch AO.

Criticisms

The public are recommended to make their own inquiries as to the impartiality of FOS. The organization is funded by the banks, who make up their members, and so is not an independent Federal Government Ombudsman, which Consumers are lobbying for, as it exists in the U.K. The criticism of this organization is that they are unable to be impartial, and independent, due to being an industry self regulatory body only.

See also

References

    External links