Financial services consumers missing out on a fair hearing

Financial services consumers missing out on a fair hearing says FSCL
The head of one of the financial services industry’s largest dispute resolution schemes says consumers are missing out because they don’t know about their right to a fair hearing.

Susan Taylor, Chief Executive of Financial Service Complaints Limited (FSCL) says that despite seeing a 100% increase in cases in the last six months, awareness of the financial services disputes regime and the role of the dispute resolution schemes remains low.

“Many New Zealanders are unaware they can seek free and independent help with problems they have with their financial services provider,” says Ms Taylor.

“Even among professionals such as solicitors and accountants, understanding of the role and powers of the financial services dispute resolution schemes remains low.”

The law requires all financial services providers to be members of an approved dispute resolution scheme. FSCL is one of four dispute resolution schemes in the financial services industry, and operates as a not-for-profit. Its participants include financial advisers, brokers, lenders, insurers and fund managers.

From the cases FSCL resolved in the six months to the end of December 2013, around 42% were complaints against insurance companies, followed by lenders and finance companies at around 16%. The product most complained about was travel insurance, followed by consumer credit agreements.

Ms Taylor says that despite increasing numbers of enquiries and complaints to FSCL, she believes many consumers may have missed the opportunity to seek help.

“Not only does this cost consumers, but also our participants, who lose the chance to rectify a problem and keep a customer happy.”

Ms Taylor said it was important for consumers to remember that disputes resolutions schemes are neither regulators nor judges.

“We do not take sides. While we have the power to make a formal ruling that is binding on our participants, our job is to listen to both sides and help them come to a resolution they are both happy with,” she says.

Background
FSCL is an independent not-for-profit external dispute resolution scheme approved by the Minister for Consumer Affairs under the Financial Service Providers (Registration and Dispute Resolution) Act 2008. It was the first scheme to be approved and has been designed for and in consultation with the financial services industry on the principles of efficiency and effectiveness. It is governed by an independent Board with equal consumer and industry representatives, and an independent Chair.

FSCL provides dispute resolution services to participating financial service providers and their clients. The FSCL process focuses on resolving complaints through conciliation and assisted negotiation and is also able to make formal determinations which are binding on financial service providers.

The FSCL process is free to consumers.

For more information on FSCL visit www.fscl.org.nz

The other dispute resolution schemes in the financial services industry are the Banking Ombudsman, the Insurance and Savings Ombudsman and the Government’s reserve scheme, Financial Disputes Resolution.

For more information about the financial services disputes resolution regime visit www.consumeraffairs.govt.nz/for-consumers/how-to-complain/financial-service-providers-disputes-resolution

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