Government Review of Australian Dispute and Resolution of Complaints Framewok

In 2016, the Australian Federal government appointed an expert independent panel to review the existing dispute resolution and complaints framework of the financial system. This includes the existing Financial Ombudsman Service (FOS), Credit and Investments Ombudsman (CIO) and Superannuation Complaints Tribunal (SCT). On Tuesday 6 December, the Review Panel released an Interim Report containing draft recommendations which include:

  • The formation of a single industry ombudsman scheme for financial, credit and investment disputes to replace FOS and CIO;
  • The replacement of the SCT with an industry ombudsman scheme for superannuation disputes, along with the development of a Superannuation Code of Practice;
  • Increases to the monetary limits and compensation caps for the new financial, credit and investment disputes scheme, for both consumer and small business disputes;
  • Enhanced accountability and oversight over the two new schemes, including by strengthening the Australian Securities and Investments Commission’s powers and more frequent independent reviews.

Once the two new ombudsman schemes are fully operational the Panel sees merit in further integrating the schemes to create a single dispute resolution body for all financial system disputes.

The SCT Chairperson Helen Davis welcomed the report’s while acknowledging the pressure on the SCT, and the opportunity the Review provides to improve external dispute resolution for superannuation consumers.  Ms Davies stated, “Superannuation is unique. The superannuation guarantee means that it is a mandated purchase by all working Australians. We agree with the panel’s observation that consumers should have access to a viable, low cost, quick and flexible alternative to the court system.”

SCT’s key focus as it engages with the Review is ensuring that the strength of consumer protection afforded by a statutory model is maintained in any future model.

The SCT received additional funding of $5.2 million in 2016, which helped with operational resources, and improved internal processes for complaint handling.

ASFA CEO Dr Martin Fahy cautioned that the government should increase funding for the SCT rather than replace it with a Superannuation Ombudsman.  Citing the complexity in superannuation where many parties may be involved, Mr Fahy said it was crucial to have deep specialist knowledge and expertise in any dispute resolution body.

A copy of the interim report has been made available on the Treasury website:

Interim Report

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