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Complaints up against banks, insurers, finance firms
THE number of complaints filed and handled by the Financial Industry Disputes Resolution Centre Ltd (Fidrec) against life insurers, banks and finance companies has gone up year on year.
In FY 2013/14, 554 complaints were processed; in FY 2014/15, the figure was 630.
But between July 2014 and June 2015, Fidrec's caseload was a far larger number than the 630 complaints filed and handled. It received 3,220 cases, of which 2,311 were classified as inquiries. The remaining cases - 909 - were classified as complaints, a figure that was down 9.2 per cent from a year ago.
Of the 909 cases received, 903 proceeded to mediation in the same period; and of the 903, 331 were filed against life insurers, up 9.6 per cent from the previous financial year.
Complaints filed against banks and finance companies also went up, climbing 18.7 per cent to 299.
General insurers followed behind with 203 cases, down by 15.4 per cent compared with the year-ago period.
The number of complaints filed against licensed financial advisers and insurance intermediaries made the greatest improvement, falling 76.6 per cent to 43 for the year.
During the same period, 27 complaints were lodged against capital markets services licensees.
Ng Wee Jin, chief executive officer of Fidrec, said the rise or fall in number of complaints against a particular category of financial professionals depends on many factors; these include the investment climate, the state of economy, the nature of the products sold by a particular sector and the number of products maturing in the given year.
"A particular sector of the financial industry may therefore experience a high number of complaints in a particular year. We would like to emphasise that having complaints lodged against a particular category do not mean that all such complaints are eventually substantiated."
He added that Fidrec was able to provide only the figures for the number of complaints filed, handled and resolved.
In FY 2014/15, for the first time in 10 years, more than half the 903 complaints (53.7 per cent) were centred on financial institutions' practices and policies.
The complaints here were about pricing policies, disputes on liability and claim amount awarded, policy values and investment returns.
Complaints about market conduct - inappropriate advice, misrepresentation and aggressive sales tactics - comprised 35.7 per cent of the 903 cases.
The rest related to service standards, including delay or failure in processes and staff issues.
Mr Ng said that in the last 10 years, the bulk of the complaints handled by Fidrec have been those on market conduct (65.2 per cent).
"In such cases, the evidence of whether there has been any wrongdoing may not be so clear from the onset. It is therefore not surprising that Fidrec sees a larger percentage of such cases," he said.
Fidrec resolved 35.7 per cent more complaints within the last 12 months, but took a longer time to do so.
Said Mr Ng: "In most cases where resolution took a longer time, it was where parties had requested for more time to prepare their cases, for example, to obtain the necessary expert or medical evidence from hospitals which require time to trace documents, especially when multiple departments have treated the patient."
Over the past decade, the alternate dispute resolution institution has dealt with more than 32,500 cases, of which more than 8,200 claims have been resolved.