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What is CFSON?

The new Centre for the Financial Services OmbudsNetwork just announced that it would start processing consumers’ complaints this fall. I am confused about how this new service relates to the existing ombudsman services. Please explain how it differs from other ombudsman services already in place.

The new Centre for the Financial Services OmbudsNetwork (CFSON), (initially introduced last December as the National Financial Services Ombudservice), is an industry-based consumer assistance service, which will provide, thorough its referral service and web site, a central contact point for consumer complaints. The Centre for the Financial Services OmbudsNetwork will make it possible for the consumer to make one phone call to a central consumer recourse service about a complaint related to a bank account, life or insurance policy, general insurance policy, stock portfolio or mutual fund. If the consumer has not yet contacted his or her financial institution, the consumer will be referred to the appropriate consumer relations specialist at that institution. If the complaint has already been fully dealt with at the financial institution and the consumer remains dissatisfied and wishes to pursue the matter further, the Centre will help the consumer access the independent ombudsman service responsible for the complaint. The Centre’s responsibilities include: The Centre’s Board of Directors is composed of 11 members, including a majority who are independent of the financial services industry. The Centre is one component of a three-part OmbudsNetwork, which also includes individual financial service providers and their company-level consumer complaint management activities and three new independent industry-level ombudservices for banking and securities, life insurance and general insurance. With respect to the independent, industry-level Ombudservices, each of the participating industry groups (banking and securities, life insurance and general insurance) is sponsoring an ombudsman service. These ombudsman services will operate independently of their respective industry associations and have their own Boards with a majority of independent directors. When they receive a complaint the Ombudservice investigators will address the issue and produce a report with non-binding recommendations, including where warranted, restitution or compensation.