Isle Of Man Gets Go Ahead For Financial Complaints Scheme

by Mandy Robinson, Tax-News.com, London

13 July 2001

The Isle of Man government has announced that it is to become the first Crown Dependency with a financial ombudsman which means that customers worldwide will soon have access to a new independent dispute-resolution scheme covering Isle of Man financial institutions. The initiative is the final piece in the Isle of Man's regulatory framework, complementing the existing regulators and compensation schemes. The legal framework of which is provided in the Fair Trading (Amendment) Act 2001 which received Royal Assent yesterday (Thursday 12 July, 2001).

Entitled 'The Financial Services Ombudsman Scheme', it will cover complaints about financial advice and products across the range of personal finance, such as banking, credit, insurance and investments. The Scheme will be open to individuals with a financial complaint against an Isle of Man firm that the firm has been unable to resolve. Once up and running, the Scheme can consider complaints relating to events occurring on or after 20th April 1999. The Scheme is expected to start in early 2002.

Under the new Act, a range of enhancements to consumer protection measures in the Isle of Man has also been introduced, including new distance selling requirements for traders dealing at a distance with their customers and further powers for the Office of Fair Trading on unfair contract terms.

Operating from the Office of Fair Trading, a first stage of mediation will offered by Office of Fair Trading consumer advisers. If the complaint remains unresolved, it will then be referred to one of a panel of adjudicators (or ombudsmen) for investigation and determination. The adjudicator will have the power to make binding awards of up to £100,000 against the firm, as well as to instruct the firm to take steps to put the matter right.

The Scheme aims to be an alternative to the courts, giving free, independent redress with a less formal approach, and will also fulfil a secondary role of promoting good practice in the Island's financial industry.

Mrs Pamela Crowe MHK, the Chairman of the Office of Fair Trading, said: 'I am delighted that the Isle of Man will be the first of the Crown Dependencies to provide an ombudsman scheme for resolving financial complaints. This will provide further security for customers around the world who take advantage of the comprehensive financial services available from this centre of offshore excellence.'

She added: 'The Isle of Man has always gone the extra mile to ensure its standards of regulation are watertight. This is the final piece of the jigsaw.'

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