The role of ombudsman: Resolving financial disputes in Malaysia

Abstract

The paper highlights the establishment of the Ombudsman for Financial Services (OFS) in Malaysia as a good alternative avenue for the equitable settlement of disputes regarding financial services. It has been operating since 2016. However, its accessibility to reach wider financial consumers is restricted due to its limited monetary jurisdiction which is incompatible with the current market conditions. Adopting a qualitative content analysis approach, this study reviews the primary legal framework for implementing the financial ombudsman scheme in Malaysia under Financial Service Act 2013 (FSA), Islamic Financial Service Act 2013 (IFSA), Financial Services (Financial Ombudsman Scheme) Regulations 2015 and Islamic Financial Services (Financial Ombudsman Scheme) Regulations 2015 with special focus on monetary jurisdiction. The study has also analyses the jurisdiction of other countries, and the results found that the monetary jurisdiction of the law in Malaysia is still small and limited. Based on comparative analysis, this study suggests an agile approach in determining the monetary jurisdiction through a flexible provision allowing a review every 3 years based on the consumer price index and relevant reports. This way, its accessibility to wider financial disputes will be elevated.