INFO Network updates
New member scheme
We warmly welcome the INFO Network’s newest member scheme, the French Financial Ombudsman (Service de la Mediation de L’Autorité des marchés financiers) andits Ombudsman, Marielle Cohen-Branche. Website
Our congratulations go to Larry Hattix, Ombudsman for the US Office of the Comptroller of the Currency (OCC), who has been appointed to the newly-created role of Senior Deputy Comptroller for Enterprise Governance. Larry will take up his new responsibilities, while continuing his Ombudsman role. He will be a member of the OCC's Executive Committee and will also oversee the OCC's customer assistance group. Media report
Update on the latest member survey on social media
Many thanks for your contributions to the member-initiated survey on use of social media. The results are now available to all members in the Ombudsman Intranet. Further contributions are still very welcome.
Website now up: http://www.info2013.tw
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News from members
From the Banking Ombudsman South Africa
Clive Pillay, Ombudsman
Regulatory Reform in South Africa. Quo vadis: Voluntary Ombud Schemes?
In 2011 a process of regulatory reform was commenced that would set South Africa inexorably on the road to implementing the Twin Peaks model of financial regulation. In February 2011, the South African National Treasury Policy document entitled “A safer financial sector to serve South Africa better”, which sets out proposals for strengthening the financial regulatory system, including a shift to a Twin Peaks model of financial regulation, was published. In July 2011 the South African Cabinet adopted the proposal of a shift to a Twin Peaks model of financial regulation.
On Friday the 1st February 2013, the Financial Regulatory Reform Steering Committee published a document entitled “Implementing a twin peaks model of financial regulation in South Africa”. This document contains detailed proposals on the implementation of the Twin Peaks model as part of the broader financial regulatory reform agenda of the South African Government. Now that South Africa is well on the way to adopting a Twin Peaks model of financial regulation, it seems apposite to put some of my thoughts on paper on the topic vis-à-vis the voluntary Ombud schemes.
My thoughts are contained in the full article which you’ll find in the Ombudsman intranet. In it I firstly deal with how globalisation, market integration, financial innovation and financial deregulation spawned the Twin Peaks model of financial regulation. Secondly I deal with how the regulatory position in South Africa evolved from a single regulator to the acceptance of the Twin Peaks model of financial regulation. I then highlight the concerns of the South African regulatory authorities regarding the voluntary Ombud schemes. Thereafter I deal with the “Implementing a twin peaks model of financial regulation in South Africa” published by the Financial Regulatory Reform Steering Committee in some detail and I conclude with my suggestion on what the focus of the current debate ought to be. Read the full article
From the Conciliatore BancarioFinanziario, Italy
Corrado Conti, Chairman
On 25 September 2012 the Conciliatore BancarioFinanziario, the Italian financial ADR scheme and member of the INFO Network, organized an International Conference on “The European Experience in ADRs in the field of banking, finance and insurance”. The conference was attended by more than 200 participants ranging from lawyers, university professors, certified mediators to students. Speakers at the Conference included, among others, our Chairman, Corrado Conti; Gustavo Visentini – professor at Luiss University in Rome; Michele Vietti – Deputy Chairman of the Italian Magistrates High Council; Silvia Costa – Italian Member of the European Parliament and all members of the FIN-NET Steering Committee which had convened the day before. FIN-NET is the European Financial Disputes Resolution Network. The conference was a really good opportunity to share experience and knowledge with each other, giving us an insight on the latest developments in this particular field in Europe.
Last year we informed members of the INFO Network, in our publication which is available on the Network’s intranet and titled “An update on the role and activity of the Conciliatore BancarioFinanziario”, that for the Italian legislation it was mandatory, for those claiming redress in banking and financial matters, to seek a ruling through a mediation procedure as a requirement before any possible successive Court action. On 6 December 2012, a ruling by the High Constitutional Court established that said legislation was anti-constitutional because it was issued exceeding the powers conferred to the then Government, therefore hindering the right of access to the Courts of Justice, for those seeking redress in banking and financial matters. So the related legislation was modified in accordance with said ruling and a mediation procedure in banking and financial matters is now no longer mandatory before undertaking Court action.
From the Banking Ombudsman New Zealand
Deborah Battell, Ombudsman
The new year has been busy so far, in keeping with our half-year statistics which show we are likely to exceed our demand estimates for the financial year for disputes, complaints and enquiries. At this stage, lending has generated nearly half of new disputes, the bulk of these around housing finance. About one-quarter of disputes concern bank accounts and the majority of these relate to transactional accounts. Remaining disputes include cards (mainly credit cards with disputes driven about participant decisions including failure to compensate for fraud/theft), insurance (loan protection insurance and life insurance) and payment systems. The main issue for the latter two types of disputes concerns transaction errors and service issues. Our half-year reporting data also shows we are exceeding our performance measures relating to efficiency.
During this period, we have run several projects aimed to improve customer experience and streamline our enquiries, complaints and disputes processing. We are currently recruiting a new Customer Enquiries Manager to replace the incumbent who unfortunately for us, is immigrating to Australia with her family. We hope to have the new Enquiries Manager on board by the end of March. Another ‘people move’ of note is that following a Cabinet re-shuffle when Parliament resumed in the new year, we have a new Minister of Consumer Affairs. In New Zealand, the Consumer Affairs portfolio has oversight of dispute resolution schemes. The new minister is Hon Craig Foss who has a treasury and investment banking background before he entered Parliament in 2005.
From the Financial Ombudsman Service (FOS), Australia
Shane Tregillis, Chief Ombudsman
Enhancing Stakeholder Engagement
Enhancing our public role and engagement with members, and other key stakeholders, is a major focus for FOS over the next three years. To improve our service, it’s critical we know what our stakeholders think of us and what they think we need to do better.
FOS has developed a consumer engagement strategy which gives consumer representatives the opportunity to share ideas with us and allows us to educate our stakeholders about FOS’s role and processes to increase understanding about our external dispute resolution process.
We have held two Consumer Liaison Group (CLG) meetings with the consumer sector, a Chief Ombudsman Roundtable with 20 senior consumer advocates around Australia and hosted our first FOS forum in Sydney with 100 financial counsellors and community lawyers.
An online hub has been developed to allow ideas and information to be shared with our CLG group and the wider consumer sector.
We are also currently developing a member engagement strategy to improve our relationships and the service we provide to our membership base of almost 17,000 financial service providers.
In December, we embarked on a major piece of qualitative and quantitative research to better understand our stakeholders and their needs. We have engaged a research company to complete this research and results will be available from May 2013.
Around the websites
On the website of the UK Financial Ombudsman Service
Where we might, and should, be going … Sir Nicholas Montagu, Chairman of the Ombudsman service, speaks at the Insurance Institute of London in February 2013
“… I want to use this talk to take a relatively dispassionate look at where the Financial Ombudsman Service is—and where we might, and should, be going. I say ‘relatively dispassionate’, because I confess that I have become a bit besotted with the organisation since taking over as chairman a year ago—and relish the opportunity to boast about it. That is because I believe that we have a great deal to boast about, in terms of our performance and of the values that underpin it. I can honestly say that I have never worked in any organisation that was more or more consistently values-driven. But boasting is only pardonable if it isn’t accompanied by complacency. And so far as the ombudsman service is concerned, there is no room for that …” Full address
On the website of the Superannuation Complaints Tribunal, Australia
Latest quarterly report on superannuation (pensions) complaints
On the website of the Financial Services Ombudsman (FSO), Ireland
Bi-Annual Review (July to December 2012)
· 8,135 complaints were made by consumers to the FSO in 2012, the highest figure since the FSO was established and a 12% increase on 2011.
· Payment Protection Insurance (PPI) complaints, representing 32% of all insurance complaints in 2012, have increased by 216% on 2011 figures.
· Banking complaints increased by 15% on 2011, with mortgage complaints accounting for almost 40% of all banking complaints.
· Banking complaints about customer care and maladministration doubled during 2012.
· Investment complaints continue to decrease, reflecting the downward trend in such complaints over the last number of years.
· In the last 6 months, there was a 50% increase in the number of complaints settled by financial institutions before full investigation, in comparison to January to June 2012.
· 2,990 Findings were issued by the FSO in 2012.
· Compensation totalling approximately €1,735,000 was awarded in 2012.
Commentary from Ombudsman, Bill Prasifka
On the website of the OmbudService for Life & Health Insurance, Canada
Second independent review of scheme
OLHI’s second Independent Review has just been completed and is published on the website to receive comments from interested parties, such as consumers, industry, regulators and the public at large. View the report
On the website of the UK Financial Ombudsman Service
Credit: case studies in catalogue shopping
“As the economic situation continues to bite and more people are finding established lines of credit closed off to them, many are turning to alternative forms of credit. Over the last year or so, we have seen an increase in the number of complaints involving different types of credit – including more complaints about catalogue shopping accounts. Many of the complaints we see have come about because the way consumers operate their catalogue accounts can be complex. Problems can arise where, for example, different payment arrangements apply to different items. Or where consumers missed a payment and went into arrears—they because they hadn’t realised that their payment date was on a 28-day cycle rather than being on a fixed date each month. We resolve many of the complaints we see by getting to the bottom of what has happened and talking it through with both sides. Relatively few complaints in this area reach the final stage in our process—a decision by an ombudsman. And we do see some examples of particularly good customer service when things have gone wrong. The case studies that follow illustrate some of the more common problems that we see, including:
- disputes over the quality of items bought from catalogues;
- adverse information being recorded on a consumer’s credit file; and
- confusion where a consumer has more than one shopping account—either with the same company or with a different one.”
Read the case studies here
AUSTRALIA: ACCC takes Visa to court in competition case
“Visa has been accused by the competition watchdog of abusing its market power and as a result preventing the expansion of foreign currency exchange services in Australia. The Australian Competition & Consumer Commission (ACCC) has lodged its case in the Federal Court, following long-standing negotiations with the financial services group. The watchdog alleges that Visa used its market power to prevent the expansion of competing currency services to new merchant outlets in Australia, such as retail stores, while preventing businesses in Australia from supplying services on ATMs in competition with Visa's own currency conversion …” Full media report
INDIA: Ombudsman washes hands of internet banking frauds
“The infinite ease of internet banking has made it a great hit among urban customers. But if one of them loses money in an internet banking fraud and if the bank does not reimburse the victim, the Banking Ombudsman too could well wash his hands of it. The Maharashtra State Banking Ombudsman has refused to intervene in a dispute between a Kolhapur-based businessman, R. Unnithan, and his bank claiming that the case involves ‘elaborate documentary and oral evidence.’ Unnithan’s net banking account was hacked and an amount of Rs.9.65 lakh was withdrawn in 24 transactions across the country between April 12 and 13, 2012. After waiting for the bank to reimburse him, Unnithan sought the Ombudsman’s help on May 23, 2013. The complaint was rejected after seven months under 13 (c) of the Banking Ombudsman Scheme which states that ‘Banking Ombudsman may reject a complaint at any stage if it appears to him that the complaint made is requiring consideration of elaborate documentary and oral evidence and the proceedings before the Banking Ombudsman are not appropriate for adjudication of such complaint’ …’’ Full media report
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