New Zealand will see an increase in the financial limits for complaints managed by the four approved financial dispute resolution schemes, effective July 18.
This change aims to enable more consumers to resolve disputes without the need for court intervention.
The government is standardising the regulations for the four financial dispute resolution services:
The update will ensure consistent thresholds for complaint values and compensation across all services, thereby providing uniformity for consumers in the financial sector. These services are designed to offer free, impartial, and independent resolution of financial service complaints.
A key change involves raising the maximum compensation limit to $500,000 plus GST. Under previous rules, consumers with disputes over $350,000 plus GST (or $200,000 plus GST for the Financial Dispute Resolution Service) could not access free dispute resolution and had to seek court remedies.
The maximum compensation for non-financial loss, including stress and inconvenience, will also increase to $10,000 plus GST. The criteria for this compensation will be standardised among all four services.
The changes have been endorsed by the services, which believe that rule alignment will enhance and standardise access to independent dispute resolution. They see this development as a significant advancement in ensuring broader consumer access to fair and free dispute resolution.
These adjustments are encapsulated in the Financial Service Providers (Rules for Approved Dispute Resolution Schemes) Regulations 2024, which will be implemented on July 18.
In other news, the IFSO Scheme recently reported achieving high marks in fairness and professionalism.
According to an independent review, the scheme is highly regarded among New Zealand stakeholders for its professionalism, transparency, expertise, rigor, and balanced approach.
“Without exception, people spoke highly of the IFSO Scheme and its professionalism. Strengths and qualities of the IFSO Scheme that were frequently mentioned were: it acts professionally; is widely respected for its expertise, rigour, and balance; is approachable, transparent, and pragmatic in how it handles cases; and it works collaboratively with all stakeholders,” the review said.
