The Financial Ombudsman Service (FOS) will work with the Australian Securities and Investments Commission to review the service’s small business jurisdiction.

Treasurer Scott Morrison says the service is a “critical component” of the financial sector, helping deliver fair outcomes for consumers quickly and efficiently.

However, the Government believes FOS’ current jurisdiction should be extended to include a wider range of small businesses loans, and a review of monetary limits and compensation caps should be carried out.

Chief Ombudsman Shane Tregillis says it is pleasing to see FOS’ important role acknowledged.

“We look forward to working with the review panel and playing our part in enhancing the role of future external dispute arrangements in the delivery of fair outcomes for consumers and small business,” he said.

Mr Tregillis believes it is critical that the panel address implementation of a compensation scheme of last resort.

“FOS has consistently argued this clear gap should be addressed so consumers can have confidence that if things go wrong they will be compensated when a decision is made by FOS in their favour.”