Territorial scope of FSP ACT translates into customer complaints
Financial Dispute Resolution Service, an approved dispute resolution scheme working with members across all financial services, has seen issues in the financial service sector translate into consumer complaints.
The scheme’s Annual Report identifies the territorial scope of the Financial Service Provider Act as a big issue for the financial services industry.
Trevor Slater, Client Director of Financial Dispute Resolution Service, explains how this issue affects the financial sector.
“Half of the complaints registered with Financial Dispute Resolution Service in 2016/17 were about foreign exchange trading platforms. Most of the complaints we received were about foreign exchange platform providers failing to follow instructions; specifically, not responding to customer requests to reimburse investments.
The vast majority of these complaints come from overseas and are about transactions that did not occur in New Zealand. However, because the foreign exchange platform provider is validly registered on the New Zealand Financial Services Provider Register, this triggers the requirement that it be part of a dispute resolution scheme,” explains Trevor.
The Financial Markets Authority (FMA) has stepped up its efforts to prevent the misuse of the Financial Services Provider Register.
“This has been a complaint trend for three years now, though the numbers of complaints we have seen over the last year are greatly reduced from previous years following the FMA’s toughened approach.
We hope to see further reductions following the Ministry for Business, Innovation and Employment (MBIE) review which has identified that businesses should be required to have a stronger connection to New Zealand in order to register on the Financial Services Providers Register,” said Trevor.
Want to know more?
Get in touch with the Financial Dispute Resolution Service team on 0508 337 337.