Financial Service Dispute Resolution Scheme On Its Way

It is vital that consumers have easy access to quality dispute resolution, and yesterday I released two discussion papers that address consumer complaints about financial service providers, Minister of Consumer Affairs Heather Roy said today.

"New Zealanders use financial services daily and, while things work well most of the time, consumers need access to good dispute resolution should something go wrong," Mrs Roy said.

"Examples include the Banking Ombudsman and the Insurance & Savings Ombudsman Schemes, which service the banking and insurance sectors respectively. While both these schemes have provided consumers with independent dispute resolution for years, other financial services consumers do not have access to such dispute resolution.

"The Financial Service Providers and Financial Advisers Acts - to be enacted in 2010 - will change that, requiring that all financial service providers be registered. Those providing financial services to the public must be members of either an approved dispute resolution scheme or a reserve dispute resolution scheme which I am tasked with setting up under the Act.

"I encourage financial service providers to form draft guidelines to form their own dispute resolution schemes. It is for this reason that the first paper released yesterday focuses on draft guidelines to assist those applying to become an approved scheme.

"The second paper sets out the proposed reserve scheme operating rules and governance arrangements. The new Act requires a reserve scheme to be established for those providers not able to co-ordinate themselves to form their own scheme.

"The disputes resolution framework is critical to the overall implementation of the new legislation, and will be implemented by May 2010. Financial service providers, including Financial Advisers, will have until December 2010 to register.

"The need for sound regulation of the finance sector has been heightened by the collapse of numerous finance companies and the current global economic climate, and this framework is one of a number of responses to address the issues in the finance sector. I invite the public to make submissions on the schemes outlined in the papers released yesterday," Mrs Roy said.

Discussion documents are available at www.consumeraffairs.govt.nz. Submissions close July 31 2009.