Ombudsman For Financial Services - Malaysia

Consumers seeking redress for disputes with their financial service providers (FSP) may turn to the Ombudsman for Financial Services (OFS) instead of going to courts as the only option.

The OFS is an independent body set up in 2016 under the initiative of Bank Negara for alternative dispute resolution. It is the first ombudsman organisation to embrace the private sector and is still the only one in Malaysia.

S. Kalyana Kumar, the ombudsman for insurance and takaful at OFS, said services are free of charge.

“The resolution process is divided into two stages. It starts with case management where case managers try to negotiate or mediate to settle the case, failing which they will make a recommendation. If either party disagrees, they can refer the matter to the ombudsman for adjudication, which is the second stage.

“An adjudication by an ombudsman is final and is binding on the FSP if it is accepted by the complainant,” he said, adding that complainants were also free to commence legal proceedings against the providers if they did not accept the adjudication.

Last year, the OFS resolved 93.2% or 1,237 out of the 1,327 cases it received.

Kalyana Kumar said the OFS does not champion consumer protection nor does it champion FSPs.

“We are an independent body and we look at the cases independently. The cases are usually resolved within three to six months and the processes undertaken are ‘inquisitorial’ in nature,” said Kalyana Kumar.

He added that among the most common complaints were related to motor vehicle insurance, life and medical insurance. He also noted that there was a surge in disputes about travel insurance policies last year.

Kalyana Kumar said this was due to consumers assuming that the insurance coverage is comprehensive without reading the terms and conditions of the policy.

“Another common thing we face is that a lot of consumers got their cars stolen after leaving their car engines running and going to convenience stores. You have not taken precaution and it is negligence on your part so insurance won’t pay,” he said.

Kalyana Kumar also reminded consumers that in accident cases, drivers should not only report to the police station within 24 hours, but should also inform their insurance providers.

Meanwhile. commenting on the government’s decision to replace the Public Complaints Bureau with Ombudsman Malaysia, Kalyana Kumar said it is a good move forward.

“It will give Malaysians a platform to lodge complaints against maladministration of government departments where actions can be taken,” he said, adding that moving forward, more ombudsman can be set up such as the Pensions Ombudsman and an ombudsman for telecommunication.