Few disputes received to date

There has been quite a bit of media recently about the financial services industry with FMA very active, the recent Financial Summit focussing upon 3rd tier lenders, a contentious high court ruling against an adviser about inappropriate advice (which seems to have some advisers "caught like possums in headlights") and a mortgage broker allegedly embezzling a number of customers.Yet there has been very little from the dispute resolution schemes.

That is because there have been very few complaints received by any of the schemes. It has come as a bit of surprise to us all, but maybe is a reflection of good complaints handling procedures being adopted by financial servcie providers. FDR encourages its scheme members to resolve complaints early and provides tips and tools to help them.

To date we have had 50 complaint enquiries, with only one developing into a dispute that we could consider under  jurisdiction.  Most of the "outside jurisdiction" issues either pre dated Scheme Member membership; the complainant did not follow through with a formal complaint, or they were members of another scheme. Most of the issues were about insufficient disclosure; failure and delay on following up on instructions from customers. These follow Australian trends.

Conciliation would have been the appropriate forum for the one dispute taken into FDR process, however both parties agreed to a determination, as one of the parties could not be in the country to attend a conciliation meeting. 

The complainant, a property developer, was seeking compensation of $80,000 from a mortgage adviser for failure to act on instructions. At the core of this complex complaint was alleged failure to act on instructions. The complaint was not upheld, but was a salutary lesson for advisers on how not to handle complaints. Had the adviser used good complaint handling practices the issue could have been resolved much earlier, resulting in less cost and hassle to all parties.

The longer a complaint is left unresolved, or if handled poorly, the more intransigent the parties become. FDR can help Scheme Members with good complaint handling practices.