1. The Consumer Council (the Council) welcomes the opportunity to submit views to the Financial Dispute Resolution Centre (FDRC) regarding the consultation document on the amendments to the Terms of Reference (ToR) of FDRC to allow for disciplinary proceedings under the Financial Dispute Resolution Scheme (FDRS) in Hong Kong.
FDRC PROPOSAL
2. As a whole, the Council supports strengthening the oversight of the FDRC mediators and arbitrators through establishing disciplinary proceedings to handle complaints against mediators and arbitrators under the FDRS, to provide a channel for redress to the users of the FDRC services and ensure the procedural fairness in the FDRS process.
3. The Council considers that the disclosure of mediation communications in connection with the complaint should be allowed to the extent necessary (e.g. amending the relevant provisions in the ToR) to enable the dissatisfied party to present the complaint and the mediator and/or arbitrators to respond.
4. To implement a successful complaint-handling mechanism, the Council believes that the key components for such a mechanism should be as independent, impartial, accessible, efficient and transparent as possible in dealing with complaints that may arise in the provision of the mediation and arbitration services.
5. For enhancing public awareness, the FDRC should consider issues of public access to complaint related information, the process for filing complaints, any time limitations or restrictions, procedures for handling complaints and appeals, as well as what disciplinary approaches the mechanism should take when it resolves a complaint with merit.
6. The Council is of the view that the mechanism cannot be of real value unless users have a sound knowledge and the understanding of it. It is therefore important that the public be informed of the mechanism. Making disclosure of information in relation to the complaint cases against FDRC mediators and arbitrators would help to promote confidence of the mechanism and maximize the creditability of the FDRC. Sensitive information in the complaints can be redacted to avoid affecting the involving parties' interest.
7. It is mentioned in the consultation document that the FDRC Disciplinary Committee/Disciplinary Tribunal would be tasked to handle the disciplinary proceedings of mediators and arbitrators. The Council supports this proposal. Appreciating that the focus of the consultation is on the amendments to the confidentiality requirements in the ToR, the Council finds it unclear just by reading the document how the committee/tribunal would be operated. The Council expects that further details will be announced later to provide sufficient transparency to the public in respect of the composition, power and authority of the committee/tribunal.
OTHER COMMENTS
8. Other than the disciplinary proceedings proposed in the consultation document, the Council would take this opportunity to provide comments on the following issues for consideration of the FDRC:
(1) Eligibility for the FDRC services: The Council is of the view that the scope limited to those of monetary disputes and financial institutions subject to the FDRS may not provide adequate protection to consumers or meet their needs, considering that many of the complaints received by the Council are related to sales practice and service quality which are not necessarily linked to disputes of monetary nature to start with, or provided by financial service providers regulated by HKMA or SFC. The maximum claimable amount and the limitation period for filing complaints which rendered many disputes ineligible under the current ToR are also areas required for review.
(2) Affordability of the FDRC services: At present, there are charges involved for cases proceeding to mediation and arbitration which may pose an economic disincentive to discourage vulnerable consumers from making complaints to the FDRC. For the benefit and protection of consumer interests, the Council is of the view that the services to be provided by the FDRC should not only be effective, efficient but also at affordable rate.
(3) Cooperation with organisations providing consumer resolution service: It is suggested that the cooperation can be further strengthened with a view to provide better protection to consumers. For example, FDRC may offer to refer cases involving parties which were not members of FDRS to other relevant bodies. This can assist consumers, who generally lack access to information about redress mechanisms in Hong Kong, in resolving their disputes through a proper channel.
9. The Council recommends that the scope and the fees of the FDRS should be reviewed by the FDRC to check on the appropriateness of the scope and fee levels. The Council believes that more consumers can be assisted with a further strengthened cooperation between FDRC and other organisations also providing the service of consumer dispute resolution.
