When there's an outbreak of complaints in an industry, the popular response is often to blame the ombudsman.
We saw that prior to the banking royal commission and now we're seeing it in telecommunications, with the government responding to the wave of complaints about NBN services by suggesting that the Telecommunications Industry Ombudsman lose some of its powers.
You can always find people who are unhappy with an ombudsman's decision – and yes, ombudsmen don't always get it right – but we need to be careful about pulling apart a system that serves most consumers very well.
Through 2016 and 2017, I worked on an independent review of complaints and dispute resolution in the financial system. We looked at how complaints were resolved, spoke to consumers who'd used ombudsmen, consulted the community legal centres that often assist them, and examined how complaints are handled overseas.
All of this led us to one conclusion: that if you get the ombudsman model right, it's one of the best ways to provide justice for consumers.
We recommended that the ombudsman model be strengthened, and the government acted upon this by establishing the Australian Financial Complaints Authority.
Of course, ombudsman schemes aren't without their critics. Some say they're controlled by industry. That's just not true. Their boards typically have equal numbers of directors with industry and consumer advocacy experience, and an independent chair, so industry representatives are in the minority.
Critics also point to the fact that ombudsman schemes are industry funded. But that's a huge strength. The funding model typically means that the firms that generate the most disputes pay the most. This creates a powerful incentive for firms to resolve customer disputes as early as possible.
Industry funding also means that ombudsman schemes are free to consumers, which is important. People who have lost their savings through shonky financial advice are in no position to pay to lodge a complaint.
And before we consider dismantling ombudsmen, think of the alternatives. The last thing we want to do is force consumers to pursue complex complaints through courts or tribunals, because those processes will always favour the party with the biggest legal budget. That's never the consumer.
Ombudsman schemes aren't perfect. But at their best, they're a fast and efficient way of resolving complaints. If we give them the right powers and resources, they can be the answer rather than the problem.
Alan Kirkland, CHOICE CEO