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No need for fewer resolution services: FSCL

A privately-owned financial dispute resolution service says the Government’s default financial dispute provider is getting an unfair and unnecessary advantage.

Thursday, April 4th 2013, 6:00AM 7 Comments

by Susan Edmunds

All financial service providers must be registered with a disputes resolution scheme.

Government-owned Financial Disputes Resolution (FDR) charges financial advisers $700 a year to be a member of the scheme, but also received a subsidy of almost $1 million from the Government last year. It had forecast the need to spend $1.694 million for the year.

The Government has previously hinted that it wants to reduce the number of dispute resolution schemes available for financial services providers to register with.

Financial Services Complaints Ltd chief executive Susan Taylor said her organisation had been vocal about the fact that FDR was an unnecessary addition to the complaints resolution sector. She said service providers who were with the FDR could easily be catered for by her organisation or the Insurance and Savings Ombudsman.

“We really feel no need at all for the Government reserve scheme given there are two private schemes open to all providers.”

She said the default scheme was suggested because when the resolution system was first proposed, it was assumed that various parts of the industry would form their own bodies. Financial services providers who fell through the gaps would need a reserve scheme.

“Then the Minister had a change of heart and allowed the reserve scheme to compete with private providers. They went out and actively sought members with advertising.”

Taylor said there was no evidence that consumers were adversely affected by having more than one scheme available to them. “We all have to play by the same rules.”

She said there had been no suggestions that providers were “scheme hopping”, moving to resolution providers that offered more favourable decisions.

FSCL is a private sector schemer, run as a not-for-profit.

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Comments from our readers

On 4 April 2013 at 10:23 am brent sheather said:
The only dispute I've had since this wrought was inflicted on my firm is with these "people" who charge me heaps and do f. all. Next life I'm definitely coming back as an executive of a financial dispute resolution service. Why cant they just charge when there is an issue...i.e. never.
On 4 April 2013 at 1:42 pm Amused said:
Agree with Brent.

Until dispute resolution service providers are required by law to screen their members “before” they can belong then frankly it’s just a money grabbing exercise! Remember you have to belong to a dispute resolution scheme first and only then can you apply to register on the FSPR.

Dispute Resolution should be about avoiding a conflict before it can even begin. Organisations like FSCL actively encourage the opposite. Good for their business I am sure but bad for the consumer and the industry as a whole.

Mortgage brokers will well remember that the lovely Miss Kerry Buddle was a member of FSCL despite the fact that NONE of the mainstream banks wanted anything to do with her at the time she joined. So essentially by been allowed to belong to a dispute resolution scheme Buddle was able to continue operating in the industry causing more and more harm to members of the public at large. Just wonderful!

Oh yes and David Ross was also a member...
On 4 April 2013 at 1:50 pm Graeme Lindsay said:
I agree Brent, but only every day!
On 4 April 2013 at 3:13 pm Hamish said:
Mr Sheather is overwrought by this rort.
On 4 April 2013 at 5:10 pm brent sheather said:
Good point Hamish !
On 4 April 2013 at 6:52 pm billy the broker said:
Wow we are all in actual agreement..and no kerfuffle..:{)>
On 5 April 2013 at 9:13 am Bill said:
The FMA want to build the public's confidence in our industry, so disputes resolution schemes are part of that - probably necessary too since we have too many ratbags and egotists amongst us.

I have found the seminars by FSCL to be quite useful and Trevor Slater can teach us all a thing or two.

In my next life I don't think I'll come back into this industry. Too much blather.


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