by Susan Edmunds
The Financial Services Providers Act requires approved EDR schemes have an external review every five years. This is FSCL’s first under that legislation.
It was conducted by Australia-based Foundation for Effective Markets and Governance.
FSCL chairman Kenneth Johnston said the board and management were thrilled with the review.
“The review was extremely thorough and professional, calling on input from our participants, complainants and government and community stakeholders, as well as a range of other sources. To hear independent feedback that our service is ‘a real life saver’ and ‘we like telling customers we are a member of FSCL and are proud to be one’ is extremely pleasing.”
He said the review confirmed FSCL met legislative requirements and adhered to principles and practices that met international benchmarks.
But as a result of the review, FSCL will make some changes.
It will amend its terms of reference to increase compensation for inconvenience from $500 to $2000, after it consults with its financial service provider participants and stakeholders.
It will push to pool resources with other EDRs to develop a single toll-free consumer complaint telephone referral facility for all the schemes and talk to the others about joint promotion.
The review suggested FSCL’s chief executive be given discretionary power to investigate an issue however it was brought to her attention – whether that was a complaint or not. FSCL said it agreed with that recommendation.
But FSCL said it did not agree with the review recommendation that the names of the financial services providers be published alongside the statistics about complaints.
It said there were privacy concerns and because determinations are binding on participants, not consumers, the quid pro quo for the participant was that complaints were investigated in confidence and without publication of the parties’ names.
“The Board will review its view on name publication at a later date.”
Claire Matthews, of Massey University, said there was nothing particularly surprising in the review. “FSCL is doing a good job but at the same time there is room for improvement.”
She said it was important that the approved schemes were not too different. “You wouldn’t want them to be identical because then there might as well just be the one but they can’t be too different because you wouldn’t want financial services providers to pick the one that would be most lenient, or nicest.”
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