Introduction to the Financial Ombudsman Service Banking & Finance Bae Bastian Legal Counsel 29 July 2009. Outline. The Financial Ombudsman Service Who are we? How we work New Terms of Reference The Banking & Finance team What we do How we work Maladministration
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Financial Ombudsman Service
Banking & Finance
29 July 2009
The Banking & Finance team
FOS has five teams:
- all retail banks operating in Australia and related entities
- some non-banks including credit providers, mortgage brokers, financial planners and non cash payment facilitators
(under new Terms of Reference can consider complaints up to $500,000 but only award $280,000)
(altered for financial difficulty claims under new Terms of Reference)
(under new Terms of Reference can consider dispute unless judgment entered)
(under new Terms of Reference, can lodge over phone as well)
Disputes closed as OTR or discontinued total: 2,390
Outcome determinedTotal: 3,959
Total cases closed: 6,349
OTR/DIS: 2,007OTR: 985DIS: 1,022
BFSO reviews dispute
OTR/DIS: 333OTR: 167DIS: 166
Resolved by Member
Dispute referred to Member
OTR/DIS: 50OTR: 10DIS: 40
Appeal by member or consumer
Appeal by member
Ombudsman’s review of member’s appeal
OTR: Outside Terms of ReferenceDIS: Discontinued
Terms of Reference:
The relevant principles are:
“Before we offer you a credit facility (or increase an existing credit facility), we will exercise the care and skill of a diligent and prudent banker in selecting and applying our credit assessment methods and in forming our opinion about your ability to repay it.”
We examine the information obtained from the borrower and the assessment of that information. Was there proper assessment of the capacity to repay the loan having regard to the standard of a diligent and prudent lender?
- What information is sought from the borrower?
- What information is verified?
- Is all relevant information taken into account?
1. The disputants’ contribution to the purchase;
2. The purchase costs which were not included in the loan;
3. Payments made on the loan;
4. Other holding costs;
5. Sale costs.
What was the financial position of the cardholder at the time the credit was advanced?
Was the credit limit appropriate based on member’s credit assessment method?
Financial Difficulty member
“ With your agreement, we will try to help you overcome your financial difficulties with any credit facility you have with us. We could, for example, work with you to develop a repayment plan. If, at the time, the hardship provisions of the Uniform Consumer Credit Code could apply to your circumstances, we will inform you about them.”
We expect a bank to:
We expect that a debtor:
If there is a breach of clause 25.2:
Melbourne Victoria 3001