Financial Ombudsman to lessen complaints

A retired judge and former diplomat, Ubhayasekera Mapa, the new Financial Ombudsman, has been on the job for a month but plans to use his experience and judicial temperament to resolve disputes that arise between customers and financial institutions in an expedient and efficient manner.

In an interview with The Sunday Times FT, Mapa said the Ombudsman scheme allows for a convenient and approachable way to resolve disputes while still allowing the parties to maintain a good working relationship. "We are trying our best to bring about and maintain the same customer relationship with the financial institution," he said. "Our endeavour is to give the message to the customer that he has found the place that expedites the grievance procedure."

Mapa said the scheme seems to have caught the confidence of the public because the entire bedrock of the institution is dependent on customer confidence. He added that the goal of the Ombudsman scheme is to decrease the number of complaints coming in, not to increase them. "What we are trying to do is to get financial institutions to look at it from the customer's point of view," he said. "It is very rarely that we take the other person's point of view. At the same time, the customer also has to look at it from the point of view of the institutions. You have to find some kind of balance between the two."

The Ombudsman scheme was set up in December 2003 by the Bankers' Association with the concurrence of the Central Bank (CB) and the participation of financial institutions in the country which include licensed commercial and specialized banks, registered finance companies supervised by the CB, primary dealers licensed with and supervised by the CB and leasing companies licensed with and supervised by the CB.

Since December 2003 to present, approximately 780 complaints have been filed and of those, 650 have been resolved. "The most number of complaints have been due to the customer's inability to faithfully keep to the terms of agreement in repaying loans," Mapa explained. "This happens in cases where they have obtained huge loans for business purposes." On average, it takes about three months to settle a matter. According to the Ombudsman scheme as far as the award is concerned, the amount cannot exceed Rs.3 million.

Financial institutions are required to display posters on grievance procedures and the existence of the scheme as well as provide brochures to customers who obtain loans. "Only then will they come to know that if there is a dispute, they can come to the Financial Ombudsman," Mapa said. "The main area of awareness is the customer, not really the general public." Financial institutions have agreed to abide by the award of the Ombudsman and Mapa commended this as an expression of genuineness on their part, illustrating their commitment to the scheme. "Every single award that has been given by my predecessor, Mr. Walter Laduwahetty, has been honoured. In that sense, we have achieved our objectives."

According to Mapa, all disputes arise due to two different perceptions. In financial institutions, primarily in banks, Mapa said people have gotten used to the system of getting documents signed to safeguard their rights. "But to what extent is the person aware of what has been signed or the bundles of paper that come his way?" he questioned. Courts will commonly say a person is bound by the document they have signed.

For example, Mapa said a person might take a loan at a certain percentage of interest and sign a mortgage contract. However, the person will also be asked to sign another document stating that the financial institution can charge the prevailing rate of interest which is usually higher. "The customer will be shocked and ask why notice wasn't given. It is a far better option to raise customer awareness." To find out more about the Financial Ombudsman scheme, visit www.financialombudsman.lk.