Nearly a third of financial claims involve fraud and scams: Fidrec
Fidrec chief executive Eunice Chua says that the mediator’s free and non-binding opinion helps parties resolve their disputes without resorting to adjudication.
Fraud and scams accounted for nearly a third of claims handled by the Financial Industry Disputes Resolution Centre (Fidrec) for the financial year spanning Jul 1, 2021 to Jun 30, 2022.
Fidrec, which specialises in the resolution of consumer financial disputes, handled a total of 907 claims in FY2021. Of these, 28.8 per cent involved fraud and scams, up from 22 per cent the year before, it reported on Thursday (Nov 24).
About 52 per cent of all claims handled were against banks and financial companies, with over half of these involving fraud and scams.
The next biggest group of claims were against life and composite insurers at some 26 per cent, followed by general and composite insurers at around 13 per cent.
The profile of claimants was skewed towards younger adults, with nearly 60 per cent aged 50 and below in FY2021. “This could signify more financial activity in consumers of a younger age,” Fidrec said, noting that consumers aged 51 and above made up the majority of claimants in previous years.
Fidrec completed a total of 967 claims in FY2021, including those brought over from FY2020. Of these, 72 per cent were completed through mediation by a Fidrec case manager. 271 claims were brought to adjudication, where 36 claimants received a monetary award.
Fidrec had implemented a new process for mediator’s indications in FY2021. Mediator’s indications are free and non-binding opinions from case managers on the likelihood of a claim succeeding at adjudication.
Chief executive Eunice Chua said that the mediator’s indication “may help parties resolve their disputes without adjudication, which will save them time and costs,” noting that a majority of cases involving these had not gone to adjudication.
The costs of adjudication are between S$50 and S$250 per claim for consumers, and S$500 per claim for financial institutions. Mediation is free for consumers.
Of the claims completed in FY2021, 86.3 per cent were processed within six months, up from 81.8 per cent a year ago. Fidrec previously shared that Covid-19 restrictions had caused processing speeds to slow in FY2020.
In total, Fidrec received 1,142 claims in FY2021. This marks the fourth consecutive year that it has received over a thousand claims. The total number of enquiries also increased to 6,549 from 6,412 in the previous year.
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