FOS announced in January it would be canvassing key stakeholders and has now reported back based on 70 interviews with 113 people across 60 organisations discussing qualitative issues in its FOS Business Plan 2013-2014. Quantitative issues were also assessed via 14,000 surveys.
FOS said that despite the feedback being broadly positive with FOS mostly deemed to be open, accessible and trustworthy, there were some respondents who “expressed strong views of dissatisfaction” both on issues of trust and the time taken to resolve disputes.
In general, consumer organisations were far more satisfied with FOS, and their relationship with FOS, compared to financial services providers.
FOS said the most common issues concerning its processes were:
- The overall time taken to resolve disputes
- The multiple touch points and stages in its current dispute resolution process
- The volume of unallocated disputes and the period of time those disputes remain unallocated
- The desire to have more specialised staff dealing with disputes during the earlier part of the dispute resolution process
FOS said it had already taken steps to begin addressing these, including a “significant project to be completed during the coming year to reduce the backlog of disputes at the recommendation stage for credit, deposit-taking and payment system disputes in the specialist resolution group”.
“As part of this project, we have included more experienced case managers in the earlier stages of our process and reduced the number of steps in the process. We intend to use this project as a pilot, and if successful, it will be implemented more broadly,” FOS stated.
In its submission to a separate independent review currently being conducted, the Financial Services Council supported FOS’s initiatives to improve service and timely dispute resolution, and also reiterated support for a number of recommendations in last year’s Richard St John Report Compensation arrangements for consumers of financial services.
FOS chief ombudsman Shane Tregillis told InvestorDaily the ombudsman would be focusing in the next year on improving the time it took to resolve disputes, and on taking a collaborative approach to working with financial services providers.
“We’ll continue working with our major stakeholders to improve the timeliness of our dispute resolution processes,” he said.
“The timeliness is longer than we’d like; that’s been a key focus for us and continues to be a key focus. We’ll also keep a close watch on ensuring the quality of our processes.”
The latest FOS annual review found an 11 per cent reduction in the overall number of disputes received, to 32,307.
A key contributor was a 22 per cent decline in financial difficulty disputes, while credit disputes (the most common form received, making up 49 per cent of the total) fell six per cent to 12,408, largely due to a decreased incidence of natural disasters in the period.
Investment disputes also fell a significant 25 per cent to 1,214, although advice-related complaints remained the key driving factor.
By product, managed investments were the main contributor to investment disputes despite falling 38 per cent from 931 last year to 579 in the current review.
The main issue in managed investment disputes was advice (51 per cent), followed by financial services provider decision (13 per cent) and disclosure (8 per cent).
Many investors complained the advice they had been given was inappropriate, according to FOS, saying it did not accord with their financial position, goals and tolerance of risk.
A majority (62 per cent) of managed investment disputes involved a financial adviser, while 27 per cent involved a managed investment scheme operator or fund manager.
“This is the first year we’ve had a levelling out after double-digit increases in previous years,” Mr Tregillis said.
“Investment disputes are a much smaller percentage [of total disputes than credit and general insurance disputes] but they’ve also decreased; that probably reflects the washing out of the impact of the global financial crisis.”
