It is never a pleasant experience when consumers are dissatisfied with their purchases. Consumer disputes are usually stressful and may turn ugly for both the buyer and seller.
Sometimes it is not clear who is at fault and when the issue cannot be settled directly with the provider, the buyer and/or seller may take the legal and more costly route.
The Financial Industry Disputes Resolution Centre (Fidrec) was set up in 2005 to provide an affordable alternative dispute resolution scheme that is independent and impartial. It adjudicates disputes between consumers and financial institutions, with a limit of up to $100,000 per claim for issues involving banks and insurers. There is no limit for mediated cases. Its services are available to all consumers who are individuals or sole proprietors.
There had been calls to Fidrec from the Consumers Association of Singapore and the public to disclose details of claims regularly to increase awareness on financial disputes. Here are some things you should know about Fidrec.
Q When can I go to Fidrec?
A Claims must be referred to Fidrec within six months of you receiving the final reply from the financial institution.
Q Do I have to pay a fee?
A Filing a complaint is free. You may lodge your complaint in person, by fax, post or e-mail. For queries, call Fidrec on 6327-8878.
Mediation is free. This is when a case manager takes your complaint up with the financial institution concerned. If he is unable to facilitate a resolution, you can proceed to adjudication, in which the case will be heard by a Fidrec adjudicator or a panel of adjudicators. There is an adjudication case fee of $53.50, payable by the consumer.
Q Should I accept the settlement offered by Fidrec's mediation?
A Weigh the pros and cons of a settlement offered at mediation. Mediation does have advantages, especially if your case may not be sufficiently strong, so do not be too quick to dismiss an offer.
Q What if I am not happy with Fidrec's ruling?
A The decision of the adjudicator or panel is final and binding on the financial institution, but not on you.
If you are unhappy with the decision, you are free to reject it and pursue your complaint through other avenues. This means that there is no disadvantage at all for you if you choose to lodge your complaint with the centre.
Q What is the Fidrec Non-Injury Motor Accident Scheme?
A This scheme helps consumers resolve non-injury motor accident disputes with insurers, in which the amount claimed is below $3,000. It covers claims by complainants against an insurance firm that is not their own insurer.
However, the dispute cap of $3,000 has been deemed too low by industry practitioners and the consumer watchdog because of increasing repair costs for cars.
Q How many complaints did Fidrec handle in its last financial year?
A There were 893 complaints handled between July 1 last year and June 30 this year, down 23 per cent from the previous year.
Most of the complaints, 396, were made against banks and finance firms. Life insurers attracted 289 complaints, general insurers were next with 167, while licensed financial advisers and insurance brokers got off lightly with only 41.
The bulk of the complaints, 517, were centred on an institution's practices and policies, including pricing and disputes on liability. There were 319 complaints involving market conduct issues such as inappropriate advice.
Fidrec resolved 1,042 complaints in the 12 months to June 30, including some lodged in previous years.
Mediation was used in 65.5 per cent of the cases and the rest went to adjudication. Awards were made in 26 out of the 359 adjudicated cases, while the rest were found to be without merit and ended up with no award to the consumers.