Ombudsman Finance – Ombudsman under fire.
Following Dispute Assist exposing the Financial Ombudsman Service for preparing inaccurate file notes on ABC 7.30 Report, Politicians are demanding change.
Listen to AM Radio story “Financial Ombudsman Service under fire as Politicians demand change”:
“Politicians are calling for the bank-backed dispute service to be scrapped, overhauled or subjected to scrutiny by the Senate or a royal commission after revelations that raise questions about the trust and credibility of the service.”
MICHAEL BRISSENDEN: Senior politicians are calling for the Financial Ombudsman Service (FOS) to be scrapped, overhauled, or subjected to a royal commission, amid questions about its independence and credibility.
Last night, ABC’s 7.30 program reported on a curious discrepancy between file notes made by one of the most senior staff at the Financial Ombudsman Service, and the actual conversations they were meant to document.
The Greens now want a proposed royal commission into the finance sector to include the bank-backed dispute scheme.
Labor wants a Senate committee to probe its conduct and independent MPs and Senators are calling for a government-run body to replace the scheme set up by the banks.
Stephen Long reports.
STEPHEN LONG: It calls itself independent, but the Financial Ombudsman Service is funded by levies on the institutions it investigates.
The Greens finance spokesperson, Senator Peter Whish-Wilson, says that’s a problem.
PETER WHISH-WILSON: There’s a very obvious conflict of interest when the industry bodies that are being investigated themselves are the ones who are ultimately funding it, simple deduction would tell you, it’s in their interest to underfund these bodies and for the determinations to be dragged out.
If not, be not heard at all.
STEPHEN LONG: Last year, a court ruled that a staff shortage, or lack of resources, was a valid reason for the bank-funded dispute resolution service not to hear complaints.
That dismayed Nick Xenophon. The independent Senator is calling for the replacement of Financial Ombudsman Service with a government-run scheme.
NICK XENOPHON: Sooner rather than later, we do need to go down the path of a statutory scheme that is supported by state and federal governments that actually has real teeth, that has the respect of the public and also has the cooperation of the financial services sector.
STEPHEN LONG: Bob Katter agrees. The MP for the rural Queensland seat of Kennedy says the number of complaints to his office about FOS, as it’s known, is like the great flood.
BOB KATTER: Inundated with cases.
STEPHEN LONG: Many of his constituents can’t get a hearing because the scheme only deals with loans of $500,000 or less, a limit that hasn’t been increased for seven years.
BOB KATTER: I mean the $500,000, that’s just silly. I mean in our day and age anyone in business would be looking down the gun barrel.
I mean the average price of a house in New South Wales is $800,000, I think.
STEPHEN LONG: The latest calls for an overhaul of the Financial Ombudsman Service have been sparked by a case raising issues of trust and credibility.
Last night, the ABC reported that a senior official at FOS had made file notes of a conversation in a contentious dispute which, recordings show, bare little relation to what was actually said.
Nick Xenophon has been probing the case on a Senate committee. He’s not satisfied with FOS’s explanations.
Labor is also concerned.
Opposition financial services spokesman, Jim Chalmers.
JIM CHALMERS: It’s important that the committee continue to look into the issues that you’re revealing now, some of these allegations and issues that have arisen in your report so that the Government and the political system as a whole can determine what needs to be done.
STEPHEN LONG: The Greens want an even more powerful light shone.
PETER WHISH-WILSON: We’ve called for a royal commission into the financial services sector and the Financial Ombudsman Service should most definitely be included in those terms of reference.
MICHAEL BRISSENDEN: Greens Senator, Peter Whish-Wilson, ending Stephen Long’s report.
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