In a submission to the Senate Economics inquiry into the performance of ASIC, COSL chief executive Raj Venga addressed item d) of the committee’s terms of reference, namely, ASIC’s complaints management policies and practices.
Mr Venga took exception to previous submissions that claimed, variously: COSL does not deal with allegations of fraud; the level of COSL’s monetary compensation limit is too low; COSL is not independent; the time it takes COSL to deal with a complaint is too long; there is a lack of transparency in the way COSL deals with and reports on systemic issues; and the relationship between ASIC and COSL is ineffective.
Under COSL’s rules, it can decline to deal with a complaint if it is satisfied that the complaint would be more appropriately dealt with in another forum, such as a court, said Mr Venga.
“If we are satisfied that there is an alternate claim that requires investigation, we will inform the parties of this and continue to deal with the complaint on this basis,” he said.
As for the monetary compensation limit, COSL can only deal with a complaint if the consumer’s loss as a result of the financial services provider’s conduct does not exceed $500,000, said Mr Venga.
“There are good reasons for limiting the monetary compensation limits of EDR [external dispute resolution] schemes. EDR schemes provide an alternative to court proceedings … and they are not bound by strict rules of evidence,” he said.
“Quite often, the parties to a complaint have differing and competing versions of events, with little or no documentary evidence in support.”
As a result, COSL “draws inferences and conclusions based on the information obtained from the parties” and makes findings on the balance of probabilities, he said.
“Given these limitations, we consider that some complaints are more appropriately dealt with by the more formal process of the courts, particularly if large sums of money are involved,” said Mr Venga.
As for independence, COSL is required to remain independent from sectors of the industry that provide it funding.
“Our services are provided free of charge to consumers. The simple fact is that if industry does not fund the operations of an EDR scheme, taxpayers or consumers would bear the cost of making a complaint to an EDR scheme,” he said.
Mr Venga also pointed out that COSL publishes information about systemic issues and serious misconduct in its annual report.
“We do not consider that there is a lack of transparency in the way we deal with and report on systemic issues, as alleged in some of the submissions to the committee,” he said.
On top of reporting systemic issues to the corporate regulator, COSL reports to ASIC on a quarterly basis.
“In this way, ASIC is able to effectively monitor and oversee our operations and ensure that we continue to meet the conditions of its ongoing approval of COSL as an approved EDR scheme,” Mr Venga said.
“We therefore do not agree with the assertion in some of the submissions to the committee that the relationship between ASIC and COSL is ineffective due to a lack of communication and oversight.”
