ISO defends its fee structure

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The Insurance and Savings Ombudsman (ISO) dispute resolution scheme charges just $1,000 for dispute fees and the average investigation takes 96 days, raising questions about how the low fee is possible.

Thursday, October 28th 2010, 7:56AM 1 Comment

by Jenha White

Other dispute resolution providers have taken a different approach to fees with costs for different stages of the process.

Financial Services complaints Ltd (FSCL) charges $1,300 for stage one of complaint resolution, $2,000 for a matter under $50,000 with a chief executive decision or $6,000 for a matter over $50,000 with an expert panel decision. It also gives one free $1,300 complaint a year.

Financial Dispute Resolution (FDR) charges $775 for level one, $2,350 for level two and $3,270 for level three.

The Banking Ombudsman would not give Good Returns fee information.

 ISO ombudsman Karen Stevens says its pricing structure formula allows it to charge $1,000.

She says 40% of the levy on existing participants is based on the number of complaints from the previous year and 60% is based on the size of their business.

She says the ISO received 1,985 complaint enquiries in the 2009/10 financial year.

"A lot of these cases we were able to turn back to the companies so they could resolve them and some situations could simply be explained to the customer and sorted out.

"We have never charged for that work either, we only charge when we've got the complaint in and we're looking at it to see what we can do and how we can add value to try and get it resolved."

She says the ISO received 284 complaints received for investigation.

"Given the number of complaints dealt with last year, the cost per complaint was roughly $1,000 and so we decided that was an appropriate fee to charge across the board," says Stevens.

Jenha is a TPL staff reporter. jenha@tarawera.co.nz

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