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The Financial Ombudsman Service in the UK and Australia helps resolve disputes between consumers and financial service providers, covering various types of financial services. Consumers must first raise the matter with their provider before the ombudsman steps in as a mediator. If no agreement is reached, the ombudsman will make a fair and reasonable decision. The UK service covers all UK-based businesses, while the Australian service is subject to the authority of the Australian Securities and Investments Commission and is open to any financial services provider doing business in Australia.
The Financial Ombudsman Service is a name used by national financial dispute resolution services in the UK and Australia. While these organizations differ in some respects, they share a common purpose. Both the UK and Australian services were created to help resolve disputes between consumers and financial service providers.
The types of financial service providers covered by the ombudsman service include banks, insurance companies, finance companies, investment firms, and financial advisers. The types of complaints that the financial broker service caters to include banking, credit cards, mortgages and loans, pensions, investment accounts, stocks and bonds, money transfers and financial advice. Financial broker services, in all these cases, are provided free of charge to consumers.
Before an ombudsman service will accept a case, the consumer is required to raise the matter with their financial services provider. If the consumer is unsuccessful at this stage, the Financial Ombudsman Service will step in and act as a mediator between the parties in an attempt to reach a solution. The vast majority of disputes are resolved this way.
If agreement cannot be reached through negotiation or mediation, the financial mediation service will consider the matter. After careful consideration, the ombudsman should then make a decision that represents a fair and reasonable resolution of the dispute. During the ombudsman’s review of the case, a number of factors should be examined, including the law, regulations, applicable regulator rules, regulator guidelines and standards, codes of conduct and industry best practices. Some disputes are resolved within months, while others can take more than a year.
If a consumer is satisfied with an ombudsman’s decision, the judgment will become final and enforceable in court against both parties: the consumer and the financial services provider. If the consumer refuses the decision, his legal status remains the same, as if he had never brought the matter to the financial broker service. At this stage, a consumer is free to go ahead and file a lawsuit if he so chooses.
The UK Financial Ombudsman Service organization grew out of the UK’s Financial Services and Markets Act 2000. Under this law, the UK service covers all UK-based businesses providing financial products and services. The UK service receives nearly a million inquiries each year and resolves over 150,000 disputes each year.
The organization of the Australian Financial Ombudsman Service is subject to the authority of the Australian Securities and Investments Commission. It is the country’s only national dispute resolution service for consumers and small businesses dealing with banking, investment and insurance transactions. The Australian service addresses issues involving credit cards, life insurance, investments, managed funds, stock brokerage and integrated pension funds, to name a few.
While the UK service extends to all UK financial businesses, the Australian service extends to those financial service providers who are members of the organisation. However, membership of the Australian Financial Ombudsman Services is open to any financial services provider doing business in Australia.
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