The submission by Dispute Assist – a company which represents consumers disputing financial services providers – accuses FOS of having an agenda to “get rid of complaints” and deny applicants “natural justice”.
The company provides several examples of cases which it claims represent evidence of FOS staff misrepresenting the facts, incorrectly interpreting its terms of reference, and pressuring applicants to accept inappropriate settlements.
Two of the cases involve allegedly bad financial advice. Another describes an incident where an FOS representative had filed notes of a telephone conversation that were purportedly inconsistent with the recording.
“The Ombudsman’s file notes do not remotely resemble the facts they purport to represent,” the submission stated.
“This leads one to seriously question the Ombudsman’s conduct, whether [the rep] is a fit and proper person to hold the position of Financial Ombudsman and most importantly whether the public can trust the FOS.”
Dispute Assist believes the reason for FOS’ supposed behaviour is a lack of resources. It references a 2013 report by Cameronralph Navigator (CRN), which highlights an issue of “significant backlog” within FOS.
“The CRN report reveals that FOS is seriously overloaded. There are serious concerns regarding FOS’s backlog of disputes. [It] points out the volume of incoming disputes continues to defy projections and that FOS has insufficient capacity to deal with large dispute volumes,” Dispute Assist wrote.
“Clearly the FOS has problems coping with the backlog it has and could not cope with the current financial advice scandal that just keeps growing.”
In responses to the submission, with the latest issued in November 2015, the FOS rejects these allegations.
“We do not consider the various assertions about FOS’s decision-making and the performance of its role to be valid. The Dispute Assist submission does not accurately reflect the current operations of FOS,” the response stated.
“Many of the issues raised have already been subject to review in public committees or inquiries.
“Recent findings by the Financial Services Inquiry (FSI), the Senate Committee Inquiry into the Performance of ASIC, and the FOS Independent Review, confirmed the important role that FOS plays in providing consumer redress, concluded that EDR is working well and noted that the role we play is well supported by industry and consumer organisations.”
The response also rejected claims that the FOS was overloaded, saying it had resolved the issue of backlogs since the 2013 CRN report.
“FOS has eliminated its backlog at all stages of the dispute process; and introduced a new streamlined dispute process which will deliver a simpler, quicker process, and improved experience for both FSPs and applicants,” the statement said.
“FOS has the appropriate capacity, resources and processes to deal with consumer disputes in the financial services industry in a fair and impartial manner, consistent with the principles set out in the FOS Terms of Reference (TOR).”
A spokesperson for Senator Sam Dastyari told ifa that the committee was aware of the allegations, and that Senator Nick Xenophon had placed questions on notice.
I had a dispute and the FOS completely twisted the evidence to suit themselves . They are biased and favour the banks at all costs . The banks are supporting this private company called thee FOS . Talk about corruption . Class action against the FOS is needed .
The FOS stated in my case we should have asked for a PDS and should have asked for a SOA . Please FOS explain to me the advisers obligations. Oh that’s right the adviser was with Whittaker Mcnaught parent company to the CBA. I’m sure if the adviser was an IFA the result would have been very different .the FOS should be locked up.
Why are these organisations set up and run by people with no understanding of financial services. I suspect FOS like ASIC is made up of solicitors who couldn’t make a living out in the real world. We need to stand together against the bureaucratic stupidity
I to have a dispute with FOS for Salary Continuance and have been waiting Months for the FSP to respond to FOS and all I hear is Your Dispute is Progressing. What about a date that must be meet, in stead of We ask the FSP to Respond. The FSPs are given so much time to respond and don’t care about Dates as FOS will always ask “AGAIN” to provide the information. Where this stops and the Decision Process starts I have yet to find. BIAS yes I think so.
I am really surprised Linda. They have very strict guidelines and with the exception of delays due to waiting for information from internal or external sources, it moves quickly. In fact, if the FSP does not respond to FOS in the timeframes provided, FOS can rule without it. The FSP must follow the FOS instructions or it can also be referred to ASIC for disciplinary action.
Hi Cynical,
Fair enough, I suppose everyone will have a different experience. But in saying that there are countless cases I know of where FOS does not back a consumer when they should have and perhaps the issue. Perhaps FOS is biased against both. I really have only witnessed big banks get nice treatment; but it could be going both ways…Maybe the real issue is that FOS is unfair to everyone and totally inconsistent in its opinions – indeed that seems to be criticism I read about often.
The fact is that in the file notes mentioned in the submission to the Senate (I have read the submission) FOS pretty much invented evidence in a court case to make the client of ANZ win- this is the gist of what I read.
It unsettles me a lot that FOS would do this even once; we are not talking about something like an opinion. We are talking about facts; like phone calls that not even take place for example…
Surely anyone would ask why would FOS present such evidence? Who benefits?
[quote name=”Cynical”]John, I don’t agree. I’ve seen FOS back the clients of the big banks 100%, knowing that they have deep pockets and will usually pay up to make the problem go away. On the other hand I’ve seen FOS be very dismissive of the clients of a small advice firm, and basically tell them ‘they should’ve known what they were signing’. To be honest, I think they choose the party to back based on the path of least resistance![/quote]
John, I don’t agree. I’ve seen FOS back the clients of the big banks 100%, knowing that they have deep pockets and will usually pay up to make the problem go away. On the other hand I’ve seen FOS be very dismissive of the clients of a small advice firm, and basically tell them ‘they should’ve known what they were signing’. To be honest, I think they choose the party to back based on the path of least resistance!
In my dealings on behalf of a client against an AMP Insurance Adviser, the mediator said my client had to take a lot of responsibility for accepting the recommendation from the Adviser that later turned out to be incorrect. Who knew FOS could turn the Adviser/Client doctrine on its head. Spent $250,000 on Lawyers instead and got a settlement. Waste of space if you ask me.
Hi Steve, I think the difference here is that it involved a big four bank (ANZ). I think the brokers and advisers sometimes get a raw deal because they are fruit easily picked and paraded by FOS to try get a pat on the back. Much harder to take on dispute resolution team of the banks (all the staff get pouched from FOS anyway) or the lawyers for that matter.
[quote name=”Steve”]That is ridiculous! Every single adviser and stockbroker who has had a FOS case will tell you that they 100% back the client everytime. They view you the adviser or broker as the big bad bully who should never of accepted that poor darling client who just didn’t know that shares go down as well as up.
Seriously, god help you if you have to endure a FOS enquiry.[/quote]
How can FOS deny biased conduct. Have a look at this: My wife and I have an unresolved dispute with the Commonwealth Bank. We asked FOS for help. FOS told us, in a twenty nine-page antagonistic determination, verbatim: ‘The FOS concluded that two people (my wife and I) who were there, on the spot, were lying.’
no they do not know because I am one of those who also was told my wife and I were liars.
Well I went to the courts to unveil 2 other clients who dealt with the same adviser as us.Surprise they 2 claim the exact same falsified documents as we did. Of course our adviser was from Whittaker Mcnaught a subsidiary of the CBA. Just to add the CBA removed unauthorized transaction documents and application and switching forms as with related adviser file notes. We are expected to live with a fraudulent FOS and CBA decision and take it on the chin. Lesson here to be learnt deal with an IFA and do not ever have any dealings with the CBA or associated parties.
Amazing all this about FOS. I personally lodged a FOS claim on my own behalf 3 weeks ago against AMP for refusing to pay my own claim From the minute I called my claims manager and I got off the phone I said to my office staff, I am going to have a problem with my claim because of the way the claims manager spoke.
I called FOS yesterday and the lady advised there are a back log cases ahead of me and it has not been assigned a case manager. gave me only an estimate when this may occur and that was a long way out could not give me an exact date maybe the end of March to mid April.
No Back Log they have to be joking.
I asked the lady do they receive many FOS complaints on behalf of Financial advisers themselves she said she was not sure it seems rare.
That is ridiculous! Every single adviser and stockbroker who has had a FOS case will tell you that they 100% back the client everytime. They view you the adviser or broker as the big bad bully who should never of accepted that poor darling client who just didn’t know that shares go down as well as up.
Seriously, god help you if you have to endure a FOS enquiry.
FOS like ASIC does not report to any Minister and are about as useful as ASIC
The FOS mediators/case managers we have dealt with lack the experience and knowledge of the industry. In my one dealing with FOS a basic knowledge of the laws governing advice is severely lacking. We found ourselves explaining what we thought were common and basic concepts. Very disappointing. Lawyers love it as they know its not a valid alternative in seeking a resolution.