More than half of financial disputes filed in Singapore were against banks, finance companies

MORE than half the claims filed with the Financial Industry Disputes Resolution Centre (FIDReC) for the financial year ended June 30, 2021 were against banks and finance companies.

During the period, FIDReC received 1,097 claims, down from 1,227 the year before. It was the third straight year that the number of total claims surpassed the 1,000 mark.

Of the claims received, 52 per cent were filed against banks and finance companies, 26 per cent against life insurers, and 13 per cent against general insurers, said FIDReC in its Annual Report 2020/2021 released on Friday (Nov 26).

Those aged 51 years and older continued to form the largest group with 51 per cent of total claims. The median claim amount was S$8,808, while the largest claim amount stood at S$1.62 million.

Among the claims filed against banks and finance companies, 42 per cent related to unauthorised transactions, frauds and scams, while 31 per cent involved inappropriate advice, misrepresentation, or disclosure issues, said FIDReC.

Among the claims filed against life insurers, 41 per cent were disputes about inappropriate advice, misrepresentation or disclosure issues, and 22 per cent were disputes on liability.

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The majority of the claims (72 per cent) against general insurers were mostly related to disputes on liability.

The restrictions brought about by the ongoing Covid-19 pandemic resulted in FIDReC concluding 82 per cent of its claims within 6 months, which was lower than the 89 per cent the previous year.

The centre resolved 862 claims in the first stage of mediation without having to proceed to the second stage of adjudication - representing 76 per cent of cases handled in the period. Of the cases concluded at mediation, 48 per cent involved a settlement. The remaining 52 per cent did not see any settlement.

Meanwhile, 271 cases proceeded to adjudication in FY2020/2021, including cases brought forward from the year before.

FIDReC chief executive Eunice Chua said the Covid-19 pandemic meant more consumers transacting online which led to a surge in claims for "unauthorised transactions, frauds and scams" in FY2020/2021.

She added that these claims took over "market conduct" as the top claim against banks and financial institutions for the period. Moreover, FIDReC also saw more investments-related claims than previous years, likely due to volatile markets and heightened financial stress.

The centre has announced that it will launch a new portal by early December 2021that is expected to increase efficiency. The new portal will have online claim-filing linked with MyInfo, as well as portals for consumers and financial institutions to upload documents and receive updates, to name a few features.

FIDReC is a not-for-profit company which specialises in the resolution of consumer financial disputes through mediation and adjudication.