ABA supports improved external dispute resolution and new compensation scheme

Sydney, 2 February 2017: Giving more people easier access to have complaints heard outside of their bank is important to protect customer interests, the Australian Bankers’ Association said today.

In a submission to the interim report by Professor Ian Ramsay from his review into the external dispute resolution system, the ABA said a one-stop-shop approach would simplify the process.

“External dispute resolution is an important alternative to the courts, and to meet its purpose it should be easy for consumers to know where to go to get their problem resolved, if they’ve not been able to with their bank or other financial institution,” ABA Executive Director – Retail Policy Diane Tate said.

“We can strengthen the current system by having a single path for people to take their complaints initially, rather than multiple paths. This could be an overarching gatekeeper which directs people where to go to progress their complaint.

“The ABA also supports expanding access so consumers can bring disputes up to the value of $1 million, and compensation can be awarded also up to $1 million.

“As part of our Better Banking program, banks are improving their own complaints handling processes and appointing new dedicated customer advocates. Six banks have already appointed their customer advocate, with the other banks committed to have theirs in place by April,” she said.

“To help build confidence in the financial advice industry, and as part of the professionalisation of financial advice, the ABA supports the setup of a new compensation scheme.

“This would be a mandatory, prospective compensation scheme that covers consumers who have received poor financial advice, but haven’t been paid compensation awarded by an ASIC-approved external dispute resolution scheme because the financial adviser is no longer in business. This scheme would be available when no other redress avenues are possible,” Ms Tate said.

A copy of the ABA’s submission is available here.

ENDS

Contact: Stephanie Arena 0477 470 677 or Nic Frankham 0435 963 913