Financial dispute resolution centre sees surge in cases
Almost half of complaints are against life insurers, with main bugbear being contractual matters.
Life insurers received the most flak from consumers in a year that saw a significant jump in the number of complaints filed with the Financial Industry Disputes Resolution Centre (Fidrec).
The number of complaints hit 1,251 for the financial year ended June 30, 2018, up 40 per cent from 893 the year before.
Almost half (47 per cent) were against life insurers, followed by 33 per cent directed at banks and finance companies, and 14 per cent against general insurers.
The rest of the complaints were against financial advisers and insurance brokers, as well as capital markets services licensees, Fidrec said in its annual report.
The centre was set up in 2005 to provide an affordable alternative dispute resolution scheme that is independent and impartial.
It adjudicates disputes between consumers and financial institutions, with a limit of up to $100,000 per claim for issues involving banks and insurers. There is no limit for mediated cases.
Of the complaints against life insurers, 53 per cent were about contractual matters while 15 per cent involved inappropriate advice or misrepresentation or disclosures.
When contacted, Fidrec chief executive Ng Wee Jin said 291 of the 309 cases that related to "other contractual matters" involved police reports filed by a group of complainants.
As the matter has been referred to the police for investigation, Fidrec is unable to handle these cases at this juncture.
For those filed against banks and finance companies, 45 per cent involved disputes on inappropriate advice, misrepresentation or disclosure issues, and 23 per cent involved credit cards.
A large majority, or 82 per cent, of the complaints against general insurers were filed due to disputes on liability.
Mr Ng said the number of complaints against a particular category of financial institutions in any given financial year alone may not be indicative of the health or integrity of that particular sector.
"The number of complaints against a particular category may rise or fall with each year, and is dependent on many factors.
"Some relevant factors would include the investment climate, state of the economy, nature of the products sold by that particular sector, number of products maturing in the given year and prevailing market sentiment," he added.
Mr Ng said not all complaints are eventually substantiated.
The centre resolved 945 complaints in financial year 2017/2018. About 96 per cent were resolved within six months and 99.4 per cent within nine months.
Of the cases resolved, 72.5 per cent involved mediation with the rest going through adjudication. Awards were made in 16 out of the 260 adjudicated cases.
Only 34 of the filed cases over the 12 months ended June involved amounts of between $50,000 and $100,000, a smaller number than expected, Fidrec chairman Koh Juat Jong noted.
The jurisdiction of Fidrec was increased to $100,000 from $50,000 in January last year.
Fidrec said mediation is free. This is when a case manager takes the complaint up with the financial institution concerned.
If he is unable to facilitate a resolution, the consumer can proceed to adjudication, in which the case will be heard by a Fidrec adjudicator or a panel of adjudicators. There is an adjudication case fee of $53.50, payable by the consumer.
As of June 30, Fidrec has resolved more than 11,000 financial disputes in all.
Services are available to all consumers who are individuals or sole proprietors, and filing a complaint is free of charge.
Consumers can lodge their complaint in person, by fax, post or e-mail. Fidrec can be contacted on 6327-8878.
The number of complaints against a particular category may rise or fall with each year, and is dependent on many factors. Some relevant factors would include the investment climate, state of the economy, nature of the products sold by that particular sector, number of products maturing in the given year and prevailing market sentiment.
MR NG WEE JIN, Fidrec's chief executive, who says the number of complaints against a particular category of financial institutions in any given financial year alone may not be indicative of the health or integrity of that particular sector.
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