Consumers should have access to an ombudsman to seek redress on complaints. Photo: Matthew Mirabelli

Consumers of financial services should have access to a special ombudsman independent of the regulator to seek redress on complaints, a task force has proposed.

The task force was set up by the Malta Financial Services Authority last year to review the current consumer redress system and propose changes.

The recommendations con-cluded it was essential to have a single independent dispute-resolution provider for investors and other consumers of financial services.

“The aim of the proposals is to setup the office of the ombudsman that is independent and autonomous of the MFSA,” the task force said.

Reference to the conclusions is found in the regulator’s annual report for 2013, tabled in Parliament this week. The MFSA presented its proposals to the government that is bound by an electoral pledge to create a financial services ombudsman.

Without mentioning individual cases, the task force admitted that various episodes in which consumers felt aggrieved by the conduct of financial services operators exposed “the weakness” of the current legal regime.

Various episodes exposed the weakness of the current legal regime

A high-profile case that hit the headlines over the past years was the Bank of Valletta property fund that went belly up leaving investors out in the cold. The bank had been fined by the MFSA for various regulatory breaches, including selling the high-risk product to inexperienced investors.

The task force said the MFSA consumer complaints unit could only seek “an amicable solution” as things stood and was proposing a two-step approach that included binding decisions.

Under new rules the financial services ombudsman would be responsible for giving advice, publishing findings and statistics, mediation, adjudication and conciliation.

The proposal would see consumer complaints first be referred to a mediator within the ombudsman’s office to try to settle the dispute “informally through mediation or conciliation”.

However, if this failed the case would be referred to the ombudsman, who would then issue a binding decision.

ksansone@timesofmalta.com