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The Finance Brokers Association of Australia has said that the merger of the Credit and Investments Ombudsman and the Financial Ombudsman Service could benefit brokers, opposing the MFAA’s position on the matter.
Earlier this week, the Mortgage & Finance Association of Australia (MFAA) rejected key elements of the Ramsay Review’s interim report on external dispute resolution (EDR), which recommends establishing a single industry ombudsman scheme for financial, credit and investment disputes (excluding superannuation) to replace the Credit and Investments Ombudsman (CIO) and the Financial Ombudsman Service (FOS).
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The MFAA argued that while a single scheme may be beneficial for the largest financial services providers, it would have a negative outcome for mortgage brokers.
MFAA chairman Cynthia Grisbrook said: “Forcing our members to join a massive, slow bureaucracy would mean they would have to contribute to a scheme that would do little to help them resolve disputes.”
However, the FBAA has released a statement supporting the proposed merger of the scheme, saying brokers would benefit in the long term having a single ombudsman, as long as it were properly resourced and staffed and able to deliver swift outcomes to disputes.
FBAA executive director Peter White commented: “It is economically sensible to combine both financial schemes but at the same time, we do not want to see a negative monopolisation to the market which impacts everyone involved.
“One ombudsman is better from a consumer and user perspective provided they have the necessary resources to ensure the issues are dealt with quickly and efficiently, which is not the case at the moment.”
However, the FBAA did echo concerns raised by the MFAA, in regards to the impact a single ombudsman would have on small businesses.
Mr White stated that, rather than bringing the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) under the unified scheme, the sector would be “better served with their own ombudsman who can focus on issues relating to their field of expertise”.
He said: “The ASBFEO should be left as a standalone ombudsman because their responsibilities and dispute resolution matters are entirely different from those being dealt with by the CIO and FOS.”
Likewise, the MFAA’s Ms Grisbrook said earlier this week: “I have no confidence that a mega scheme would serve the needs of consumers and small businesses seeking mediation on issues as they arise…
“We would like to see the needs of consumers and small businesses served by creating an effective set of policy recommendations around dispute resolution, not simply the creation of a new massive complaints bureaucracy.”
[Related: Brokers blast association conflicts]
