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If you're seeking monetary compensation, you could either take your complaint to the court system for resolution; or consider an alternative - mediation and arbitration with the Financial Dispute Resolution Centre. The FDRC provides a one-stop service for assisting individual customers and financial institutions to resolve monetary disputes with a maximum claimable amount of HK$500,000.

To enable the FDRC to process your complaint, you need to file a written complaint concerning the dispute with the relevant financial institution, and either has received a final written reply from that financial institution; or has received no final written reply after 60 days from the date of the written complaint. Read more to file an application.

Things to note when using Financial Dispute Resolution Centre

  • Claimant is an individual / sole proprietor.
  • The financial institution involved in the dispute must be authorised by the Hong Kong Monetary Authority or licensed by the Securities and Futures Commission
  • Maximum claimable amount of HKD500,000
  • Has filed a written complaint to the financial institution but still cannot resolve the dispute within 60 days
  • Apply within 12 months from the date of purchase of the financial service or the date on which the Claimant first had knowledge that he has suffered monetary loss
  • Awaiting for the investigation results from the regulators but would like to apply to FDRC to resolve the monetary dispute
  • The claim is not about investment performance or policies fees

Hotline: 3199 5199

Address: 15/F, AIA Hong Kong Tower, 734 King's Road, Quarry Bay, Hong Kong

The following are two successful cases regarding disputes on forced liquidation and education insurance plan.

Case: Forced liquidation

Ms Lee had long been investing in stock margin trading with a brokerage firm. One day, the stock market was volatile and Ms. Lee received a call from Mike, her broker, at 10 am requesting her to deposit money into her account by 11 am that day in order to maintain the margin level requirement. She made the deposit right away and immediately called Mike to inform him of the deposit she made. Mike requested her to send him a copy of the pay-in slip as confirmation of the deposit. Ms. Lee did not have access to the fax machine at that time. She gave the transaction reference number to Mike instead and asked him to call back if it was not acceptable. Mike called back Ms Lee the next day. He had liquidated her position on the ground that he did not receive her pay-in slip before the deadline.

Ms Lee was upset. She thought that she had fulfilled the margin requirement before the deadline. She complained to the brokerage firm. The brokerage firm stated that they were unable to locate a client's deposit without a pay-in slip and they had the right to liquidate a client's position to manage risk.

Ms Lee made an application for mediation at FDRC and the case did not settle. She then opted for a 'papers-only' arbitration at the FDRC.

Having considered all the documents and information provided by both parties to the arbitration, the arbitrator from the FDRC List of Arbitrators proceeded to issue an arbitral award. In the arbitral award, the arbitrator held that the brokerage firm had the right to liquidate Ms Lee's position under their contract but due to the poor communication on the part of the brokerage firm, a small amount of money was awarded to Ms Lee.

Case: Education insurance plan

Mr Chan bought an education insurance plan at a bank 15 years ago. He wanted to use the money, when the plan matured, to pay for his son's university tuition fees. This year, his son was admitted to the university and the plan also matured. However, Mr Chan found out that the amount he could get from the plan was HK$100,000 less than the total premium he had paid over the past 15 years. He felt that the situation was different from what the bank staff had told him. He lodged a written complaint to the bank.

The bank explained that the shortfall between the actual and the expected maturity values was caused by Mr Chan's partial cash withdrawal several years ago which subsequently affected the roll-over cash value of the plan. The bank added that the bank staff had already explained all the policy provisions to him at the time of selling and Mr Chan had signed the relevant documents to acknowledge his understanding of the provisions. Mr Chan could not resolve the dispute with the bank. He made an application to FDRC for his case to be resolved by mediation.

The mediator helped both parties to identify the issues in dispute and assisted them to generate options for settlement. As a gesture of goodwill, the bank offered Mr Chan a small sum of money to cover part of his son's tuition fees. Thus, Mr Chan could pay his son's tuition fees with the maturity value of the insurance plan and the bank's offer. Mr Chan was very happy that the tuition fee problem was resolved and his son could continue his university education. And the bank was pleased to keep the banking relationship with Mr Chan.

Source: Financial Dispute Resolution Centre