The release of the Financial Ombudsman Service (FOS) annual report today highlights just how important this service is for consumers. Over 30,000 people accessed the free and independent dispute resolution services of FOS during 2012-13.
“When it comes to access to justice, the existence of external dispute resolution schemes such as FOS is one of the most significant advances in consumer protection of the past 30 years,” said Fiona Guthrie, Executive Director of Financial Counselling Australia.
“Without FOS, thousands of people would have been left with no avenue for redress other than courts, or more likely, because of cost and other access barriers, would have been left with nowhere to turn.”
Each year, financial counsellors – who work in non-profit community organisations – assist thousands of people in financial difficulty. FCA noted that financial difficulty disputes remain the single largest dispute area in banking and finance (44% of all disputes), but that there has been a 22% reduction overall in this category.
“Financial counsellors are delighted that the number of financial difficulty disputes handled by FOS has reduced,” said Ms Guthrie. “This reduction, at least in part, is a testament to a new approach by the banking industry to assisting customers in hardship. Positive steps include a new industry hardship guideline, the inclusion of information about financial difficulty assistance on the home pages of websites, investments in staff training about hardship and additional resources.”
The 2013 Rank the Bank report released by FCA and all of the State and Territory financial counselling associations earlier this year however, still shows that there are gains to be made across the board. The smaller banks in particular do not always offer an adequate range of hardship options or understand the realities facing their customers struggling with repayments.
FCA looks forward to continuing to work with the banking industry and FOS to improve the way consumers in financial hardship are assisted.