Consultation
Stakeholder Consultation
The proposals were the subject of a discussion paper which was released in August 2006, along with other discussion papers in the Review of Financial Products and Providers. 139 submissions were received on the RFPP papers, of which 42 contained comments on consumer dispute resolution.
Some key concerns raised by submitters include:
- Some submissions related to the existence of a problem and the ability of improved dispute resolution arrangements to solve the problem (eg one submission noted that consumer decisions to borrow or invest are not made because of the existence, nature or form of dispute resolution or redress procedures; decisions are made for more positive reasons often in ignorance of the existence of such procedures) – this has been addressed by noting that dispute resolution is only one component of consumer confidence, and further work on improving consumer financial capability is also ongoing.
- Concerns were expressed that government intervention might damage the existing goodwill and industry commitment to external dispute resolution – this has been addressed by ensuring that the approval criteria for dispute resolution schemes closely reflect current practices as much as possible.
- Concerns were expressed that the proposal could result in industry funding the dispute resolution system but without any say in its operation – this has been addressed by limiting government involvement to approval of schemes, with a hands-off approach to the day-to-day governance and operation of dispute resolution schemes.
- Concerns were expressed about the potential scope of the proposed dispute resolution system – this has been addressed through limiting access to "consumers" (note that MED will be undertaking further work on establishing appropriate definitions of consumer in particular sectors), and through requiring that the Minister must have regard, when deciding whether to approve a scheme, to matters such as the jurisdiction of the scheme and any monetary limit on the liability of scheme members.
Government Departments/Agencies Consultation
The following government agencies have been consulted on the proposals in this paper: Ministry of Consumer Affairs, Reserve Bank, Treasury, Ministry of Justice, Securities Commission, Retirement Commission and Commerce Commission. No significant concerns have been raised.
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