Govt will pay unpaid FOS determinations
The Government delivered few financial services surprises in the Federal Budget, but did announce that it would be providing $30.7 million to pay compensation to consumers who have been victims of unpaid Financial Ombudsman Service (FOS) determinations.
The Government had committed to the introduction of an industry funded compensation scheme of last resort, but the Treasurer, Josh Frydenberg, went further in the Budget with respect to the Commonwealth funding the unpaid determinations.
“The Government is committed to ensuring consumers and small businesses affected by misconduct have access to redress,” the Budget documents said.
“The Government established the Australian Financial Complaints Authority (AFCA) last November: a one‑stop shop for free, fast and binding dispute resolution. The Government will provide $2.8 million for AFCA to establish a historical redress scheme for eligible financial complaints dating back to 1 January 2008 (the timeframe adopted by the Royal Commission).”
“The Government will provide $30.7 million to pay compensation owed to consumers and small businesses from legacy unpaid external dispute resolution determinations.”
It said it had committed to an industry‑funded compensation scheme of last resort and would provide $2.1 million to Treasury and $0.5 million to AFCA to establish the scheme.
Recommended for you
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
