Is a banking tribunal really the answer?

High Court Australia

Consumers Federation Australia along with the Consumer Action Law Centre, Financial Rights Legal Centre and Financial Counselling Australia have written a letter to the Prime Minister, Minister for Financial Services and the Treasurer in response to announcements of the Federal Government possibly instituting a financial services tribunal.

CFA, along with other signed organisations have raised key concerns on the potential damaging impacts of the introduction of a new banking tribunal.

The development of External Dispute Resolution (EDR)  schemes has seen great achievements within the consumer protection sector, providing justice and positive outcomes to consumers who would be otherwise limited by current legal tribunals and courts. CFA welcomes the recent announcement of a review into EDR schemes within the finance sector.

This allows for areas to see improvement within EDR schemes. CFA and its coalition of organisations push for an increase in both financial jurisdiction and resolution on the issue of  ‘last resort’ compensation. Furthermore, CFA acknowledges the benefits of the decision by the Financial Ombudsman Service to extend its jurisdiction to improve coverage of small business concerns.

However, CFA discusses critical issues on the decision to implement a new tribunal. CFA, along with FCRC, CALC and FCA are aware of the possible delivery of poor outcomes for consumers. The issues raised within the letter are:

  •  may potentially drag out or delay dispute resolution, particularly if it is added to existing bodies or is not funded appropriately;
  • may operate legalistically, as is the case with many other Australian tribunals, creating barriers to access that many consumers may not be able to overcome;
  • may create further or multiple bodies in financial sector dispute resolution, exacerbating consumer confusion; and
  • may not address the issues underlying customer dissatisfaction with the banking sector in so far as the inadequacies relate to the applicable law as opposed to the decision-making forum.

The letter is available in full both here:  Banking Tribunal Letter and on the CFA website.

CFA welcomes a response from the Federal Government to discuss the matter further.