Foreword

Everyday, New Zealanders use one or more of an extensive list of financial services available to them. These include:

• Day-to-day transactions such as the use of EFTPOS and credit cards, internet and telephone banking, writing cheques;
• Purchase of insurance for travel, personal effects, health, vehicles, homes and more;
• Obtaining financial advice relating to investments or different credit options;
• Taking out mortgages or credit for consumer goods, from motor vehicles to household goods;
• Depositing money in term deposits, investment shares, debentures.

Despite using such services, however, most New Zealanders don't think of themselves as participants in the financial market. Rather, we are simply going about our daily business paying for goods and services, using banking, insurance and credit services.

For most of us, these transactions occur without any cause for concern and we are confident when using electronic transactions, banks, credit unions etc. It is for this reason that consumer confidence is really important – without it, we cannot have a well-performing financial sector.

But things can go wrong with the provision of financial services, and it can be very stressful for the individual affected when this occurs.

As soon as something does go wrong the consumer should, in the first instance, contact their product or service provider to see whether the matter can be resolved directly. The issue often relates only to a minor fault, problem or misunderstanding and can readily be resolved.

Occasionally, however, the consumer and provider cannot agree. This leads to a dispute.

In order to promote confidence in financial service providers, the Financial Service Providers (Registration and Dispute Resolution) Act 2008 improves consumers' access to redress and dispute resolution by requiring financial service providers offering financial services to the public to sign up to a dispute resolution scheme.

Under the Act, financial service providers have two options: join an industry-run dispute resolution scheme approved by the Minister of Consumer Affairs, or sign up to the government reserve scheme.

This discussion paper outlines draft guidelines to assist schemes considering making an application to become an approved dispute resolution scheme.

Your views on the proposed guidelines are welcomed, and I hope that financial service providers will take advantage of the opportunity afforded by the Act to establish their own schemes have them approved. The best delivery of consumer dispute resolution occurs when the industry is committed to supporting a robust and independent dispute resolution process.

Hon Heather Roy

Minister of Consumer Affairs