Ombudsman for Financial Services

September 2016
by Wong Mei Ying, Yoon Ming Sun

The information in this article is intended only to provide general information and does not constitute professional advice or legal opinion.

@2018 Chooi & Company + Cheang & Ariff.
All rights reserved.

Bank Negara Malaysia announced on 28 September 2016 that the Ombudsman for Financial Services would commence operation as the operator of the financial ombudsman scheme (“FOS”) on 1 October 2016. The FOS is provided under the Financial Services Act 2013 and Islamic Financial Services Act 2013 and administered by Bank Negara Malaysia to ensure effective and fair handling of complaints and resolution of disputes in connection with financial services and products. The Financial Services (Financial Ombudsman Scheme) Regulations 2015 and Islamic Financial Services (Financial Ombudsman Scheme) Regulations 2015 (collectively, “FOS Regulations”), both of which came into force on 14 September 2015, regulate the FOS.

Under the FOS, financial service providers (“FSP”) such as licensed banks, approved insurance brokers, approved financial advisers, approved issuers of designated payment instruments and licensed insurance brokers (excluding professional reinsurers and licensed insurers carrying on financial guarantee insurance business) must be members of the FOS and are required to comply with the terms of membership of the FOS.

The services under the FOS are an alternative to and not replacement for legal actions taken in a court of law. The services of the Ombudsman for Financial Services are offered free of charge to financial customers. Financial customers may refer disputes with the FSP to the Ombudsman for Financial Services for resolution provided the disputes fall within the scope of the FOS as set out below. Pursuant to the FOS Regulations, the members of the FOS are bound by any award granted under the FOS and accepted by the eligible complainants.

Disputes referred to the Ombudsman for Financial Services must not exceed the monetary limit specified in the FOS Regulations. A dispute involving financial services or products developed, offered or marketed by a member, or by a member for or on behalf of another person must not exceed RM250,000. The FOS provides a limit of RM10,000 for a dispute on motor third party property damage and a limit of RM25,000 for a dispute on an unauthorised transaction through a designated payment instrument or channel and a dispute on unauthorised use of cheque.

A complaint or dispute that is referred to the FOS after more than six months from the date the member of the FOS has provided its final decision and a complaint or dispute that is time barred under the Limitation Act 1953 or Limitation Ordinance (Sabah) (Cap.72) or Limitation Ordinance (Sarawak) (Cap. 49) falls outside the jurisdiction of the FOS. A complaint or dispute on capital market services or products offered or marketed by a member of the FOS also falls outside the jurisdiction of the FOS as investors may file their disputes with the Securities Industry Dispute Resolution Center instead.  Please refer to the Ombudsman for Financial Services’ website at http://www.ofs.org.my for information on eligible disputes covered by the FOS and procedures for bringing a dispute to the FOS.


The information in this article is intended only to provide general information and does not constitute professional advice or legal opinion.

@2018 Chooi & Company + Cheang & Ariff.
All rights reserved.