Almost half of the complaints accepted by the Financial Ombudsman Service (FOS) related to credit products, with disputes about home loans and credit cards the most common in 2012-2013.
Yesterday, Australian Broker reported on COSL credit ombudsman, Raj Venga’s comments that new home buyers may be stretching themselves too far in the pursuit of their dream home. Venga further added that a third of the complaints his service receives are about mortgage stress and financial hardship.
However, FOS offers some positive news as well. After four years of ‘large’ increases in dispute numbers, the ombudsman service says it has finally experienced a reduction in overall dispute numbers – down 5% from 2011-2012.
FOS chief ombudsman, Shane Tregillis, says a key contributor to the reduction in overall disputes was a 22% decline in financial difficulty disputes.
“This appears to be a result of the improvements by the major banks and other financial service providers to their financial hardship programs over the last few years following the changes introduced under the 2010 National Credit Code.”
Many Australian borrowers have also had a reduction in repayment pressures given the lower interest rates of the past few years and Tregillis says this may have played a part in reducing the number of financial hardship disputes coming to FOS.
“There was also a big reduction in natural disaster disputes due to a much higher prevalence of flood cover following recent legislative changes and the efforts by the insurance industry to improve practices in this area over the last couple of years.
“Investment disputes have also declined 25%; the main reason appears to be that the impact of the GFC on the number of disputes coming to FOS is now diminishing.”
Tregillis says the early resolution of disputes continued to be a key focus for FOS.
“Fifty-five per cent of all disputes were closed within 60 days and 73% within 120 days in 2012-2013.
“We recognise there is still much work to be done to improve how quickly we resolve disputes and this will be a key focus of our efforts over the coming year.”