IF YOU are frustrated with the Ombudsman for Financial Services (OFS) for not settling your dispute with financial service providers (FSPs) speedily, you are not alone.
More than half or 52% of the disputes referred to it take anything from six months to a year to settle. And it’s all because of a surge in claims due to the increasing number of financial scams in the country.
Not only has the number of scams increased, the cases have also become increasingly intricate, often involving multi-faceted schemes.
This is putting a strain on the OFS’ resources. Inevitably, the resolution of other claims such as medical claim disputes are also affected, reported The Health newspaper in its latest edition, stating that it could take up to a year to resolve a dispute.
In response, OFS CEO Marina Baharuddin said investigating these scam cases requires additional time as it gathered supporting documents and evidence from various entities such as banks, e-money issuers, third-party merchants, telecommunication providers, etc.
“These scam cases frequently involve unique and evolving methods employed by perpetrators,” she revealed. “Thus, we must thoroughly comprehend the precise sequence of events and circumstances leading to the compromise of bank accounts, e-wallets or cards.”
To manage rising workload, the OFS has recruited new personnel and continuously evaluated the need for additional staff. Although the OFS’s Client Charter commits to a prompt and fair dispute resolution within three to six months – subject to case complexity – only 48% of the cases were resolved within six months.
Despite these challenges, Marina assured that most medical and other insurance/takaful cases are typically resolved within six months. “OFS continues to adapt, recruiting additional personnel to address rising workloads and evolving dispute complexities.”
Dispute resolution
Regarding the dispute resolution of cases that extend beyond the six-month mark, Marina emphasised the diverse complexities inherent in each case. Some cases may necessitate extensive investigation or negotiations, leading to resolutions surpassing the six-month mark.
“Certain cases may necessitate further investigation or obtaining documents, such as medical reports from government hospitals which could extend the resolution timeline to 12 months,” shared Marina.
“We may seek a legal opinion where necessary. If the requested information is not provided within the specified timeframe (14 days/30 days), we may extend.”
She further explained: “For example, OFS has encountered challenges related to the interpretation of “medically necessary” clauses in insurance policies, particularly concerning the utilisation of specialised medications or procedures not sanctioned by Health Ministry (MOH).
“This ambiguity often leaves policyholders uncertain about their coverage and can lead to disputes between insurers, healthcare providers and patients.
“In response, proactive measures, including proposals to FSPs, have been initiated to enhance transparency and understanding.”
By working collaboratively with industry stakeholders, OFS seeks practical solutions that benefit consumers and FSPs, according to Marina.
The OFS is a non-profit organisation regulated by Bank Negara Malaysia (BNM). It was formerly known as the Financial Mediation Bureau (FMB) and commenced operations in 2005.
For the record, FSPs are also members of OFS with some of their representatives sitting on the OFS board.
In 2023, the OFS received 194 disputes encompassing life insurance, family takaful and general medical insurance categories. Of these, 111 cases (57%) were related to medical and hospitalisation claims. – April 26, 2024
Main image credit: Compare by MyEG
