Japan Panel Wants Stronger Financial Consumer Protection

Tokyo, Dec. 3 (Jiji Press)--A Japanese panel plans to propose that
the government provide legal status to financial industry groups that offer
out-of-court dispute resolution services, in order to bolster financial
consumer protection, it was learned Wednesday.
By the end of this month, the Financial System Council will compile
a set of proposals that includes legal recognition of the industry groups
that already serve as mediators in disputes between consumers and financial
institutions under the system of alternative dispute resolution, or ADR,
which was launched in Japan last year.
The proposals come on the back of growing calls for strengthening
the role of the groups in matters such as swift out-of-court settlements of
disputes over financial products, including nonpayments of insurance
benefits to policyholders.
The financial industry organizations include the Japanese Bankers
Association, the Life Insurance Association of Japan and the Japan
Securities Dealers Association.
While praising the groups' voluntary dispute settlement activities,
the council stressed the need for fairness and neutrality by their legal
registration as ADR organizations.
Based on the proposals, the Financial Services Agency plans to
revise the relevant legislation to designate the industry groups as ADR
organizations and then urge financial institutions to cooperate with them in
resolving disputes.
The FSA-linked panel initially considered setting up an independent
ADR body to comprehensively handle disputes over financial services
including deposits, loans and insurance products, but it concluded that the
introduction of such body would be too expensive.