Rise in financial complaints demonstrates value of regime

Rise in financial complaints demonstrates value of disputes resolution regime

The Chief Executive Officer of dispute resolution scheme FSCL says the steady growth FSCL has seen over the last year only serves to reinforce the value of the disputes regime.

Susan Taylor says the scheme’s Annual Report, released today, shows a 62% increase in the number of cases it resolved in 2012/13 and a 10% increase in new participants joining the scheme.

“In the last year we have had over 1,700 enquiries from consumers seeking information about how to make a complaint. I’m optimistic that this illustrates a shift towards consumers being more aware of the availability of free and independent disputes resolution services in the financial sector.

“But we remain concerned that awareness levels are still not where they should be.”

In the Annual Report, Ms Taylors says that condent and empowered consumers are a key part of a dynamic economy by driving innovation and supporting competition.

“While consumer laws provide core protections for all consumers, other arrangements, including dispute resolution schemes and codes of practice, are just as important in providing consumers with condence.”
Ms Tayor says that effective dispute resolution at the industry level is an alternative to government regulation and a low-cost and timelier alternative to the courts.

Complaints against insurers once again made up the greatest share of cases FSCL investigated in 2012/12 (54 of 149 complaints). However, complaints against lenders/nance companies rose sharply to 39, up from 17 last year, and insurance brokers made up the third highest category of provider complained about with 17 complaints, up from 9 last year.

“In the majority of cases we worked with our participants and their customers to settle the issues without the need for us to make a formal ruling,” says Ms Taylor.

“Often all it takes is for an independent third party to look at the issues afresh and facilitate a way forward.”
Despite the increased workload, the scheme has increased its productivity, enabling it to reduce participants’ annual fees by 10% for 2013/14.

“FSCL offers an important service to our participants, and it is important we give them value for money.”
Ms Taylor says financial service providers need to have processes in place to ensure that customer complaints are taken seriously.

“Dispute resolution schemes, such as FSCL, play a critical role in ensuring that their customers have access to credible, efcient and exible dispute resolution.”

FSCL’s Annual Report 2012/2013 is available on its website at www.fscl.org.nz/annualreports.php

ENDS

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