CIO rejects government’s single EDR scheme

The Credit and Investments Ombudsman (CIO) has voiced support for a banking royal commission, saying the single dispute resolution scheme is a “complete waste of money” and will not help expose bad bank behaviour.

In response to the federal budget, which contains measures for a single EDR scheme known as the Australian Financial Complaints Authority (AFCA), CIO chief executive Raj Venga said the only winners from a CIO-FOS merger will be the major banks. 

Mr Venga said that reviews like the Ramsay review have been hastily commissioned to fend off calls for a royal commission and are politically convenient solutions that fix nothing.

“It would be utterly reckless to design a one-stop-shop for consumer complaints without first seeing what a royal commission or banking commission of inquiry would uncover," he said. 

"It is painfully ironic that the major banks will be the big winners of AFCA. They know the one-stop-shop is a diversion to avoid a royal commission."

Mr Venga added that the new AFCA will be no different to the CIO and FOS.

Advertisement
Advertisement

“Not having statutory powers, CIO and FOS were never intended, nor are they equipped, to publicly expose bad behaviour, impose penalties on financial firms or deal with complicated disputes involving large sums of money. Being non-statutory, AFCA will be no different," he said. 

"Similarly, AFCA will not be equipped to weed out poor corporate culture, call out moral obloquy or fix embedded organisational cultures. Only a royal commission can do this. Nor will it be able to impose penalties for wrongdoing – only a statutory tribunal can do this.

“It would be grossly irresponsible and a complete waste of money to create a one-stop-shop which may fall short of the [royal commission's] findings and recommendations.”

ifa reported in April that the CIO had been assembling a coalition of various industry bodies to push back against the single EDR scheme, saying it could potentially create a monopoly that is less accountable to stakeholders. 

 

 

 

 

CIO rejects government’s single EDR scheme
default
ifa logo

Subscribe to the ifa bulletin

Receive daily online news,analysis, reports and business strategies
By signing up you agree to our Terms of Use and Privacy Policy

from the web

Website Notifications

Get notifications in real time and stay up to date with content that matters to you.