Advisers not recognising complaints: FSCL

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Disputes resolution schemes need to work to improve their visibility with the public but that doesn’t mean they want to encourage  complaints, FSCL’s chief executive says.

Wednesday, October 29th 2014, 5:59AM 1 Comment

by Susan Edmunds

In the scheme’s latest annual report, Susan Taylor said it was concerning that only one in 10 consumers could name one disputes resolution scheme and only 60% recognised one when prompted.

“These results show that more has to be done to ensure that consumers know there is somewhere they can turn if they have a problem with their financial service provider. First and foremost, providers need to be willing to tell their consumers what they are entitled to,” Taylor said.

In the year to June 30, FSCL received 3159 inquiries or complaints from consumers about financial service providers, an 84% increase on the previous year. Of those, complaints and inquiries about lenders and finance companies headed the list (834), followed by transactional service providers such as trading platforms and foreign exchange dealers (616).

Of the 202 inquiries that went through to the scheme’s formal complaints processes, 17 related to insurance advisers, four to financial advisers and two to mortgage advisers.

Taylor said the complaints related to advisers were mostly about fees and charges the customer believed had not been property disclosed or were unreasonable, or about advisers whom the client said gave poor advice or sold them an unsuitable product.

“We do see cases where adviser hasn’t recognised it as a compliant. Any expression of dissatisfaction should be seen as something to be dealt with.”

Taylor said in more than half the cases they’d dealt with since the start of the year, complainants weren’t told about FSCL by their financial service provider.

“We need that to change. Providers need to recognise that offering their customers access to a free and independent dispute resolution service is a real marketing tool. It’s something they should be actively promoting – on their websites, in customer statements, in phone messages.”

She said many people found FSCL through an internet search or were referred by their budget adviser or a community law service.

“Most should be coming from the financial services provider. They have an obligation to make sure unresolved complaints come to us. It’s not about trying to drum up complaints. It’s about giving consumers greater confidence in financial services which ultimately benefits the industry, consumers and the economy.”

But she said by and large most financial services providers were doing a good job of resolving complaints in the first instance. “That can be seen by the very large number of initial complaint inquiries - very few come back to be formally investigated.”

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