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.
“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.
Absolutely support CIO position. Banks just want to commoditise negligence claims and be able to avoid accountability. You need a genuine forum where parties can deal with facts and take action.
The lack of appeal for advisers in the Ombudsman process is wrong as it encourages spurious claims from aggrieved persons. People who have been ripped off deserve a chance for recompense but it should not be an invitation to rip someone else off in the process.
Separate advice provision from the selling of someone’s own product and this type of issue would largely evaporate.