Singapore - The number of consumers who have grievances against financial institutions (FIs) in Singapore has grown, says data from the Financial Industry Disputes Resolution Centre Ltd (Fidrec).
Between July 2015 and June 2016, the centre handled 1,162 complaints, up 29 per cent year on year.
These complaints were directed at banks, finance companies, life and general insurers, capital markets services licensees, financial advisers and insurance brokers.
Leading the pack with the most number of complaints handled by Fidrec are banks and finance companies (38 per cent), followed by life insurers (37 per cent) and general insurers (19 per cent). Capital markets services licensees, financial advisers and insurance brokers made up the remaining.
Banks and finance companies had the greatest rise in number of complaints, up 48 per cent year-on-year to 442.
This was followed by life insurers, whose number of complaints went up 31 per cent to 434, while that of general insurers grew 7 per cent to 218.
Compared to the year-ago period, the number of complaints against capital markets services licensees remained flat, while those against financial advisers and insurance brokers slid 5 per cent.
Of the total complaints Fidrec handled in FY2015/16, more than half were related to the FIs' practice and policies, 38 per cent were to do with market conduct, followed by service standards and others.
Consumers were most unhappy with banks and finance companies, life insurers, financial advisers and insurance brokers for providing inappropriate advice, misrepresentation or issues related to disclosure.
Ng Wee Jin, chief executive of Fidrec said such complaints related to the appropriateness or lack of any advice given by the sales representative; the accuracy or lack of any explanation provided by the sales representative; the non-disclosure or inadequate disclosure of any fees, charges and product features.
"Market conduct-related complaints are more complex. In such cases, the evidence of whether there has been any wrongdoing may not be so clear from the onset. It is therefore not surprising that Fidrec, in general, sees a larger percentage of such cases," he added.
Having said that, Mr Ng noted that the statistics only cover cases where consumers have not been able to resolve the issues with FIs, and require mediation and adjudication services.
For general insurers, consumers were most agrieved over disputes on liability, while it is the delay or failure in processes for capital markets services licensees.
Over the one-year period, Fidrec received 1,161 cases and handled 2,757 inquiries. This was 28 per cent and 19 per cent more than the previous year, respectively.
Even as the case load rose to 1,021, Fidrec was more efficient in resolving them.
Of these, 48 per cent was resolved within three months; 98 per cent resolved within six months; and 100 per cent of the complaints resolved within nine months.
Out of the 1,021 complaints that were resolved, 713 were achieved through mediation, while 308 proceeded to adjudication. Awards were made in 53 out of the 308 adjudicated cases. There were 480 pending cases as at end-June 2016.
On this, Mr Ng said the actual time taken to resolve a dispute depends on many factors, including the extent or complexity of the dispute; time taken to retrieve relevant documents; and availability of parties to attend mediation or adjudication hearings.
Separately, the financial mediator's financials have swung back to the red in FY2016, recording a net loss of S$121,044 from net profit of S$540,268 a year ago.
Revenue for the year edged up three per cent to S$3.3 million but this was offset by higher expenses.
Total expenditures came to S$3.5 million, a jump of 20 per cent year on year. In particular, office rental rose 54 per cent to almost S$744,000.
Fidrec also incurred an expense on the restoration of office premises of more than S$100,000.
The centre's head of finance, Liu Li Li said the net loss was mainly incurred by a one-time relocation cost when Fidrec moved to its new office at City House.
This article was first published on November 29, 2016.
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