Cross-border disputes Adrian Dally Head of Policy
Financial Services & Markets Act 2000 a statutory footing... we are the statutory ADR scheme set up by Parliament Financial Conduct Authority (the regulator) Financial Ombudsman Service (adjudicates on unresolved disputes) Financial Services Compensation Scheme (fund of last resort)
our role… we are tasked with resolving individual disputes “quicklyand withminimum formality” • our job is to settle individual complaints: • fairly • quickly • reasonably • informally • we cover all retail financial businesses based in the UK… • …and some based elsewhere in the EEA who have joined voluntarily • it does not matter where the complainant lives – anywhere in the world.
the process… 2 mediated settlements adjudicator assessment customer contact team formal conclusions adjudicator investigation to ombudsman unable to resolve
300000 280000 260000 240000 220000 200000 180000 160000 140000 120000 100000 80000 60000 40000 20000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 the number of new cases... year ended 31 March
accessibility matters… some groups of consumers find it harder to complain than others so we try to make it easier to contact us The problem – in the past, we had fewer complaints from: • younger consumers • consumers from ‘lower’ socio-economic groups • consumers with disabilities • consumers whose native language was not English…
accessibility matters even more… …because this reflected deeper issues in society as a whole… …and we realised from stakeholder research that: • consumers from ‘lower’ socio-economic groups were more likely to experience detriment from financial businesses • the average UK / EU reading age was 11 • even in 50 years time, we will still have to deal with many consumers ‘off-line’
what we did… we made it easier to contact us by removing as many barriers as we could • specially-trained team of front-line advisers to work with vulnerable consumers • work with front-line community and advice workers to reach ‘lower’ socio-economic groups • three-way telephone conversations • on-line video and audio content • text-relay and sign-language • information in alternative formats – e.g. large print, CD/DVD, EasyRead
language matters too… in 2012 we had 1910 complaints from outside the UK from 104 different countries in 46 different languages We handled this by: • instant over-the-phone interpretation • translation of correspondence • website information in 25 languages Total of 2282 cases handled in languages other than English or Welsh – 25% in non-European languages
the results so far… morecases from ‘lower’ socio-economic groups and from those with a disability or from non-white backgrounds Some positive progress, for example: • cases from unskilled consumers 5% 12% • cases from skilled / semi-skilled consumers 36% 54% • cases from professional / managerial consumers 59% 34% • 21% of complainants have a disability (18% in population) • cases from non-white consumers 8% 12% …with no difference in outcomes between groups
cross-border disputes matter… The internal market in financial services is growing • 4% of EU citizens holdingshares, bonds or investment funds bought them in another Member State, • 3% of EU citizens havinga bank account opened itin another EU country, • 2 % of those witha mortgage, credit card or personal loan bought their product in anotherEU country and • 1% of those havingan insurance product bought it in another Member State.
so we have FinNet… …to help consumers find the right ADR body when they complain about a trader in another member state • the consumer contacts the nearest (home) ADR body. • the nearest ADR body provides the consumer with the information about the ‘competent’ ADR body in the country of the financial services provider then • the home ADR body sends the complaint to the ‘competent’ ADR body (or helps the consumer to do so)
FinNet coverage… …is getting better, but there are gaps
FinNet’s caseload… …is growing
the challenges ahead… …there are a number of challenges if ADR is to achieve its full impact • achieve fuller coverage • better accessibility for all consumers – not just on-line • better visibility and branding • better links with regulators • better added value through transparency