Create a ‘mega’ ombudsman, not banking tribunal: O’Dwyer

Yesterday, a government appointed panel released a report of its review into Australia's industry ombudsman scheme, calling for the creation of a single industry ombudsman scheme to replace the Financial Ombudsman Service (FOS) and the Credit and Investments Ombudsman (CIO).

According to Ms O’Dwyer, this recommendation has received an “overwhelmingly positive” response, including from consumer groups.

“I am particularly heartened by the response from consumer groups who deal directly with people who have experienced long-running disputes with banks and institutions that offer financial products,” she said.

The panel, however, rejected the need for a new statutory tribunal in the finance and banking sector, which was proposed by the House of Representatives standing committee on economics.

Ms O’Dwyer said consumer groups support this rejection, with one advocate saying a banking tribunal “would do nothing to fix the underlying cases of consumer harm”.

“They understand better than anyone that consumers caught up in disputes need a body that will help resolve their issues quickly and without a drawn-out, expensive and highly legalistic process,” Ms O’Dwyer said.

“Meanwhile, Labor wants to push a process that will take years, will deliver the most financial benefit to lawyers and will not make any practical difference to those who have complaints about the past conduct of the banks. Royal commissions cannot make compensation payments.”

The government is considering the interim report from the panel and encourages submissions on the recommendations. A final report from the panel is expected to be released at the end of March 2017.