Financial limits for complaints about financial service providers are being raised and streamlined by the country’s four approved dispute resolution schemes.
The services are:
- Banking Ombudsman Scheme
- Insurance & Financial Services Ombudsman Scheme
- Financial Services Complaints – a Financial Ombudsman Service
- Financial Dispute Resolution Service
From 18 July 2024, each will have the same thresholds for complaint values and compensation, providing consistency for consumers.
The key change is raising the maximum compensation to $500,000. Â Previously, consumers with financial disputes over $350,000 (or $200,000 for the Financial Dispute Resolution Service) were not eligible for free dispute resolution and would have to go to court.
Additionally, the maximum compensation for non-financial loss, such as stress and inconvenience, will increase to $10,000, and what this can be awarded for will be standardised across all four services.
The Financial Service Providers (Rules for Approved Dispute Resolution Schemes) Regulations 2024 will take effect on 18 July 2024. All amounts stated are plus GST.
Read Clinton Stanger‘s commentary: Dispute Resolution Changes May Increase Risk for Insurers.