11 October 2016
Sydney, 11 October 2016: The Australian Bankers’ Association has today called for improvements in the way customers can have their complaints heard independently if their bank is not able to resolve issues.
In a submission to the Federal Government’s review of external dispute resolution, the ABA said a one-stop-shop would be the best way to simplify the current process.
“Banks try first and foremost to work through any problems with customers; but if customers want to have their complaints heard outside of the bank, we think this should be easier to do,” ABA Chief Executive Steven Münchenberg said.
“At the moment there are three main organisations that handle financial services disputes – the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal.
“If there was one body to handle disputes or direct people where to go, this would help customers get their disputes resolved faster. It would also make the process easier as customers would know exactly who to contact for help,” he said.
“Whether we have an overarching gatekeeper or one ombudsman or a tribunal, the dispute resolution system should focus on ensuring that customers who can’t access the formal legal system can get a fair hearing, and that the system is easier for customers to use.”
The submission also advocates the need to establish a scheme to compensate people who have had a ruling by an external dispute resolution scheme in their favour where they received poor financial advice, but cannot get their money back because the financial adviser has gone broke or did not have adequate insurance to cover customer losses.
“We support a mandatory, industry-wide last resort compensation scheme applying prospectively and being funded by all financial service providers, including banks,” Mr Münchenberg said.
“In reality, such a scheme would not be used by bank customers because banks have the capital strength to compensate customers if needed, but we think it’s an important initiative to build trust and confidence across the financial services sector.”
Mr Münchenberg said banks were taking action now to deliver better outcomes for customers, having launched an extensive six point reform package in April this year.
This includes appointing dedicated customer advocates in each bank to help resolve complaints and putting their pay structures under the microscope as part of an independent review, to ensure that staff are not incentivised to put their interests ahead of their customers’.
A copy of the ABA submission is available here.