The Credit and Investments Ombudsman (CIO) has responded to a report issued by Financial Counselling Australia, setting out the results of a survey of its members comparing their experiences with CIO and the Financial Ombudsman Service (FOS).
According to the CIO, the report is a late contribution to the current review of external dispute resolution (EDR) in financial services, being undertaken by an expert panel led by Professor Ian Ramsay.
“While the FCA has used this report to argue for a merger of the schemes, in fact the ability to compare schemes and identify where each is doing better or has room for improvement is precisely why we continue to argue for the existing two scheme arrangement,” CIO’s CEO and Ombudsman said Raj Venga said.
“The fact that only 15 per cent of the FCA’s members completed the survey also suggests merger is not high on the agenda of those at the coalface of client service delivery.”
The Credit Ombudsman said the comments of those financial counsellors who have had recent experience with either or both schemes show that both FOS and the CIO can continue to improve. However, he added that they also clearly reflect the different types of members of each scheme.
“FOS’s big bank members are able to make commercial decisions to resolve complaints quickly, whereas CIO members are more likely to seek a merits-based decision, which will usually involve a longer process,” Mr Venga said.
“While consumers and their advocates might like quick outcomes, there is no room for criticism of a process that produces the right outcome.”
Mr Venga noted that some of the more thoughtful comments from respondents to the survey also offer cautionary advice regarding a possible merger, advice which the FCA does not appear to be heeding.
“These recognise the positive things that CIO does differently to FOS, which might be lost, and the dangers of having a single, monolithic EDR scheme,” he said.
According to Mr Venga, financial counsellors are involved in only 2.9 per cent of complaints received by CIO.
“A more accurate picture is painted for us by the experience of those complainants,” he said. “In 2015/16, 61 per cent of complaints were resolved in favour of the consumer. Our feedback surveys for that year show that 66 per cent of consumers were satisfied with our services. That is, a greater proportion of consumers were happy with our services than actually received an outcome in their favour.”
“Notwithstanding the agenda driving the survey,” Mr Venga said, “we will take this as valuable feedback and consider what we can do to respond constructively. The FCA can only take on trust the hope that a single scheme, when delivered with challenging feedback, would have the impetus to do the same.”
[Related: Financial counsellors back ombudsman merger]
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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