A statement arguing against the proposed EDR scheme has today been signed off and jointly released by a consortium including the Mortgage and Finance Association of Australia, Customer Owned Banking Association, Australian Collectors & Debt Buyers Association, Association of Securities and Derivatives Advisers of Australia, Australian Timeshare and Holiday Ownership Council and Association of Independently Owned Financial Professionals.
Jointly these bodies claim to represent “80 per cent of all financial firms in the Australian market”, including those that are members of FOS and of the Credit and Investments Ombudsman.
The joint statement takes issue with the single EDR scheme outlined in the federal budget, and argues that the government embarked on insufficient consultation with key stakeholders.
“The associations are also disappointed in the way the Ramsay review was conducted,” the statement said.
“The panel only held two public consultations with industry, during which it refused to articulate the reasons for proposing a single monopoly scheme and failed to engage with the credible arguments put forward by the associations.
“The associations believe the ‘one-stop shop’ will undermine the fabric of external dispute resolution (EDR) in the financial services sector because, as the weight of evidence submitted by industry suggests, the continued and separate existence of FOS, CIO and the SCT is vital in ensuring accountability, innovation and cost control in EDR.”
The statement suggests that “large financial firms” will be the beneficiary of the government’s proposed scheme, while “smaller and more innovative financial firms” will be disadvantaged.
It calls on the government to “abandon” its plan to establish a single “monopoly” scheme.
The statement comes as Prime Minister Malcolm Turnbull has strongly defended the EDR scheme, telling Parliament yesterday that this policy, alongside the levy on big banks, is proof the government is providing “real action” and not just talk when it comes to ensuring financial institutions act in a more pro-consumer manner.
Venga desperate to save his comfy gig – can’t argue with fact that economically firms are better off in one scheme. Tax payer better off too as ASIC don’t need to oversee two EDr schemes and therefore more efficient use of resources.
How many industry bodies do we need and what do they do to add value?
Commoditising justice for the institutions is all this is about.
Insto don’t really care about the damage they cause. They just want to limit how much money they have to pay out when caught. They also want less headlines and a quick and easy payment regime means far less news stories about the poor consumer.
Its all about deniability in the long run.
Pollies and instos.