A number of membership associations from across the financial services spectrum have combined efforts to oppose the government’s single dispute resolution scheme as recommended in the Ramsay report.
A statement arguing against the proposed external dispute resolution (EDR) scheme has been signed off and jointly released by a consortium including the Mortgage and Finance Association of Australia, Customer Owned Banking Association, Australian Collectors & Debt Buyers Association, Association of Securities and Derivatives Advisers of Australia, Australian Timeshare and Holiday Ownership Council and Association of Independently Owned Financial Professionals.
Jointly these bodies claim to represent “80 per cent of all financial firms in the Australian market”, including those that are members of FOS and of the Credit and Investments Ombudsman.
The joint statement takes issue with the single EDR scheme outlined in the federal budget, and argues that the government embarked on insufficient consultation with key stakeholders.
“The associations are also disappointed in the way the Ramsay review was conducted,” the statement said.
“The panel only held two public consultations with industry, during which it refused to articulate the reasons for proposing a single monopoly scheme and failed to engage with the credible arguments put forward by the associations.
“The associations believe the ‘one-stop shop’ will undermine the fabric of external dispute resolution in the financial services sector because, as the weight of evidence submitted by industry suggests, the continued and separate existence of FOS, CIO and the SCT is vital in ensuring accountability, innovation and cost control in EDR.”
The statement suggests that “large financial firms” will be the beneficiary of the government’s proposed scheme, while “smaller and more innovative financial firms” will be disadvantaged.
It calls on the government to “abandon” its plan to establish a single “monopoly” scheme.
The statement comes as Prime Minister Malcolm Turnbull has strongly defended the EDR scheme, telling Parliament yesterday that this policy, alongside the levy on big banks, is proof the government is providing “real action” and not just talk when it comes to ensuring financial institutions act in a more pro-consumer manner.
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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