The financial services industry's three major complaints schemes will merge in an effort to deal more efficiently with millions of dollars in disputes.
The Financial Industry Complaints Service (FICS), the Insurance Ombudsman Service (IOS) and the Banking and Financial Ombudsman Service (BFSO) have agreed in principal to amalgamate from July 1, 2008.
But the Federal Government has indicated it wants to see a merger of all seven ASIC-regulated external disputes resolution (EDR) schemes across the mortgage broking, financial services, banking and credit sectors into one single body.
The three schemes planning to merge already work out of the same building in Melbourne and share a common consumer hotline and information technology system.
They have varying levels of monetary limits under which they compensate consumers.
The corporate regulator is advocating for increased cohesion in the monetary limits.
However, each scheme's individual dispute resolution process will continue after the merger of the operations, FICS chief executive Alison Maynard said.
"One of the requirements set by the three boards was that the specialised approach to dispute resolution adopted by each of the three schemes must continue," Maynard said.
Parliamentary Secretary to the Treasurer Chris Pearce welcomed the announcement.
"This change, once implemented, will be beneficial for Australian consumers who may have a dispute with a bank, an insurance company or a financial adviser," Pearce told InvestorDaily.
"The Australian Government supports the simpler and streamlined dispute resolution process that this merger will deliver," he said.
There will be no job cuts in the immediate future as a result of the merger, but the new entity will look for ways to be more efficient in the long term, Maynard said.
"We're not looking for anyone to lose their jobs," Maynard said.
"My immediate plans are to stay on and work hard at successfully amalgamating the organisations," she said.
"And it will be hard work."
