Savvy consumers driving disputes rise

by Adam Smith14 Dec 2011

The Financial Ombudsman Service has said consumer awareness is behind a massive rise in disputes.

FOS reported a 27% rise in disputes for 2010 and 2011, and said the area to see the largest uptick was credit. Disputes over home loans, credit cards and personal loans rose 44% for the year.

However, the increase is not due to the poor behaviour on the part of credit providers, but rather an increasing public awareness of EDR schemes, according toa  FOS spokesperson.

“Awareness is one of the factors. That’s something that is a key objective moving forward. Accessibility is absolutely paramount, and we’ve seen success in that area and are hoping to build on it in the future,” the spokesperson said.

Dealing with the influx of complaints made it a "challenging" year, according to Ombudsman Shane Tregellis. FOS has added staff members to handle the rising rate of disputes, and saw 50% of complaints resolved within two months and 79% resolved within six months. Though the proportion of disputes resolved in 60 days improved over 2011, FOS said disputes going beyond 180 days increased.

“This is an area that is very much a work in progress, and it’s front and centre for the organisation. It’s an area the organisation has made huge gains in over the past 12 months,” the FOS spokesperson said. “As we all know intuitively, some cases are clear and conducive to coming to an agreement and some are more complicated. It takes more time for both parties. There’s always going to be a level of complexity in some of the cases we deal with, and it’s a lengthier process.”

Ultimately, the spokesperson said the Ombudsman would like to see fewer complaints, with more disputes being resolved by IDRs before FOS has to become involved.

“Our endeavour is to work as closely as we can with members to support them to deal with disputes as quickly as possible. Our goal is to have as many disputes as possible dealt with between members and the individual rather than for it to come to FOS,” she said.

Financial Ombudsman Shane Tregillis called the year a “challenging” one for consumers, the industry and FOS.


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