Finance sector consumer complainants get redress

Consumers who have been unable to resolve a complaint with their financial adviser or service provider will have access to an independent and free dispute resolution service under a Bill passed in Parliament today.

Commerce Minister Lianne Dalziel and Consumer Affairs Minister Judith Tizard welcomed the passage of the Financial Service Provider (Registration and Dispute Resolution) Bill which is part of a suite of reforms of the finance industry.

Judith Tizard said the bill created a co-regulatory model, under which industry groups will develop their own schemes which will then have to be approved by the Minister of Consumer Affairs.

"The criteria that all approved schemes must meet are the internationally accepted benchmarks of accessibility, independence, fairness, accountability, efficiency and effectiveness," Judith Tizard said.

There will also be a reserve scheme established for providers who do not belong to an approved industry dispute resolution scheme.

"Only service providers who offer a service to the public will be required to join a dispute resolution scheme - so this exempts family trusts, for example - and the dispute resolution services must be available to consumers and small businesses and organisations. Furthermore, we are making them accessible and equitable by not permitting such services to charge a fee to any complainant," Judith Tizard said.

Lianne Dalziel said all financial providers must be registered and belong to a dispute resolution unless they are providing advice incidental to their professional service (eg. as a lawyer, accountant, tax agent or real estate agent) and are regulated in law by their own professional standards.  It also exempts not-for-profit organisations who provide free financial services, such as community budget advisers.

"The register, which will be managed by the Companies Office, will provide a useful resource for consumers, industry and regulators by providing a searchable access point for information on financial providers. This will also assist New Zealand to fulfil our international obligations under rules curbing money laundering or the financing of terrorism," Lianne Dalziel said.