COSL independent review released

The Credit Ombudsman Service Limited (COSL) has released an independent review of its operations against benchmarks prescribed by the Australian Securities and Investments Commission (ASIC) for EDR Schemes.

The review concludes that COSL meets most of the industry benchmarks and the requirements of ASIC’s RG.139 with a couple of areas where it did not think that the standard was quite met.

The review made 47 recommendations.

It concluded that COSL is not yet fully achieving the Fairness Benchmark. It noted that “Provided that COSL dedicates the necessary resources, it seems to us, however, that the Fairness issues that we have identified are capable of being quite readily addressed.”

In this area it recommended that “COSL should develop more written guidance for its case managers to help them deal with common complaint scenarios, for example, allegations of excessive early termination fees or failure to provide accurate disclosure or to fulfil commitments about fees, interest rates or other matters etc. When undertaking this work, COSL should research other EDR scheme approaches and attempt to achieve a harmonised approach with FOS. Any differences in approach should be capable of clear explanation to consumers.”

The review also commented on the question of competition as between the two remaining EDR schemes in the Australian financial sector, COSL and FOS:

“there is now substantial overlap with FOS and emerging contrasts between the approaches taken….. The scheme is less than one-tenth the scale of its competitor and has significantly less complaints experience. It will inevitably struggle to achieve the same level of in-house expertise, infrastructure, management professionalism, economies of scale, etc. This struggle will be much exacerbated if COSL is to accept members from all sectors of the financial industry.”

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