First dispute resolution scheme approved
Financial Services Complaints Limited (FSCL) is the first dispute resolution scheme to be approved under the Financial Service Providers (Registration and Dispute Resolution) Act 2008.
Monday, May 3rd 2010, 12:44PM
Minister of Consumer Affairs Heather Roy, has advised FSCL that this approval "marks an important step in the implementation of the Act".
At close to 300 participants FSCL is the largest private dispute resolution scheme so far.
FSCL chairman Ken Johnston says at the moment the majority of interest in participation comes from brokers and advisers.
"They have the most to gain from early participation. The authorisation process can only proceed after Financial Service Providers (FSPs) are registered, and they cannot register until they join an approved scheme."
Johnston says FSCL is only dealing with complaints arising from events that occurred after 1 April this year.
Ministry of Consumer Affairs consumer policy manager Evelyn Cole says the reserve disputes resolution scheme rules should be finalised by mid-May and the provider finalised by the end of May to mid-June.
Aside from the reserve scheme, Cole says the Insurance and Savings Ombudsman Scheme is the only other application that has been received for approval. The Ministry has also been advised that an application will be forwarded by the Banking Ombudsman Scheme.
Johnston has words of caution for other FSPs.
"This legislation is a sea change in financial services and adapting to it is not an overnight exercise. FSPs would be well advised to act early as our current members have done."
Under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 any FSP who is not registered cannot be in business from 1 December this year.
Private dispute resolution schemes allow consumers to take complaints about those FSPs who are members of the scheme, to an independent and impartial arbiter.
The FSP is bound by the decision and must pay the costs.
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