WHY THE OMBUD SYSTEM MATTERS

Financial customers have the right to be treated fairly by financial institutions. These institutions are required to follow the principles of Treating Customers Fairly (TCF), which are designed to protect the rights and interests of consumers. If a customer believes they have not been treated fairly, they can—and should—submit a complaint to an ombud.

There is no fixed list of reasons for complaints and financial customers can speak up whenever they believe that a financial institution has not met the expected standards in how they deal with them. The financial ombud system is very important for helping people feel confident in financial services. It helps solve complaints quickly and easily.  There is no need for lawyers to use these services, and they are free of charge.  The ombud system works with licensed and authorised financial institutions to make sure everything is fair and clear in the financial world. It also helps ensure that customers are treated fairly by looking at complaints and spotting any new problems that may arise. By resolving individual complaints and identifying patterns of misconduct, the system not only provides redress to customers but also contributes to broader improvements in industry practices.

Central to this system is the TCF framework, which is built on six key outcomes:

  1. Corporate Culture: Customers can be confident they are dealing with firms where fair treatment is embedded in the corporate culture.
  2. Product Design and Targeting: Products and services are designed to meet the needs of specific customer groups and are marketed appropriately.
  3. Clear Communication: Customers receive clear, timely information before, during, and after the point of sale.
  4. Suitable Advice: Where advice is provided, it is suitable and reflects the individual circumstances of the customer.
  5. Performance and Service: Products perform as customers were led to expect, and service is consistent with those expectations.
  6. No Unreasonable Barriers: Customers do not face unreasonable obstacles when trying to switch providers, change products, submit claims, or lodge complaints.

By upholding these outcomes, the financial ombud system supports fairness, reinforces customer confidence and it promotes integrity across the financial industry.