Consumer financial disputes' claim limit to be raised to $150k

The claim limit for consumer financial disputes will be raised from $100,000 to $150,000 starting July. 

The Financial Industry Disputes Resolution Centre (Fidrec), an independent body which specialises in the resolution of such disputes, said on June 24 that the limit is being increased in the light of the rising cost of living as well as a growing number of financial disputes exceeding $100,000.

Other changes that will be implemented include the setting and enforcing of timelines for completing the claims process. Fidrec can close cases or impose penalties within a month if these timelines are not met.

Consumers and financial institutions will receive the adjudicator’s grounds of decision online, which means they will not need to attend a hearing at Fidrec for the decision to be read to them. Parties will still have to attend an adjudication hearing.

Fidrec will not handle claims that have been previously dealt with by the body or claims related solely to investment performance without any misconduct or wrongdoing.

The body will also implement what is called a mediator’s indication (MI) process for all disputes, where a neutral person helps the parties reach an acceptable outcome. The MI will take place with the consent of both parties, except for non-injury motor accident third-party claims below $3,000, where the MI is mandatory. 

The revisions follow a public consultation by Fidrec that began in January and ended on Feb 29. Fidrec said the proposed changes received “broad support” from 55 respondents, including individuals, financial institutions and several associations.

Fidrec chief executive Eunice Chua said on June 24: “The upcoming changes to Fidrec’s terms of reference not only incorporate the feedback we have received over time but also international best practices.

“These changes will enable us to serve a wider audience, achieve better outcomes for parties and improve our processes.”

Fidrec also announced that small businesses will soon be able to file complaints, expanding eligibility beyond individuals and sole proprietors.

It noted that respondents were concerned that small businesses were better resourced than individual consumers and claims brought by them could be more “complex and unsuitable” for informal dispute resolution.

Fidrec received suggestions on defining small businesses and said it will delay implementing this revision to see how best to address these concerns before giving more details.

The change to include small businesses is tentatively scheduled to take effect in January 2025. 

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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