Transcript Complaint Reviews

FOS’s
Dispute
Resolution
Process
Jack Furphy, ERT General Manager – Early Resolutions
Bae Bastian, Legal Counsel – Banking & Finance
Financial Ombudsman Service (FOS)

Is an ASIC approved External Dispute Resolution
(EDR) Scheme operating across the financial
services sector.

Deals with disputes from individuals and small
business in relation to Banking, Credit, General
Insurance, Life Insurance, Superannuation and
Investments.

Can consider a dispute where the amount of the
claim is less than $500,000, although the most
compensation we can award is $280,000.
Dispute Resolution Process
(www.fos.org.au/elearning)
Registration
• Internal Dispute
Resolution
Acceptance
Case
Management
• Review
• Negotiation
• Conciliation
• Investigation
Outcome
• Recommendation
• Determination
Registration

A dispute may be lodged with FOS using our online dispute form, through
the mail or, if the customer requires assistance, over the telephone.

Over 60% of disputes lodged with FOS are made using the internet. A
person who lodges a dispute with FOS is called an Applicant.
Registration

When a dispute is first lodged, we need to determine:
–
–
is the dispute about a financial services provider that is a member of
FOS?
has there already been an opportunity for the financial services
provider to conduct its internal dispute resolution (IDR) process?

If the financial services provider has already had an opportunity to
complete its IDR process, the dispute will progress straight to our
‘acceptance’ stage where it will be allocated to someone for review.

If the financial services provider has not had an opportunity to complete
its IDR process, we will ‘register’ the dispute.
Registration

The following information is relevant in determining whether there has
already been an opportunity for the financial services provider to conduct
its IDR process:
–
–
–

has the applicant made a complaint directly to the financial services
provider?
if so, how long ago did the applicant complain?
has the applicant received an IDR response from the financial
services provider?
For most types of disputes, the financial services provider has up to 45
days from the receipt of a complaint to complete its IDR process. For
credit-related disputes involving default notices or requests to postpone
enforcement proceedings or to vary credit contracts because of financial
hardship, the timeframe is 21 days.
Registration

The registration process is designed to put the applicant in touch
with the financial services provider so that the IDR process can
be completed.

When we register a dispute, we send an e-mail to the financial
services provider with details of the dispute, including a
summary of the complaint and the applicant’s contact details.
The e-mail asks the financial services provider to contact the
applicant and to complete its IDR process.

At the same time, we e-mail the applicant and ask them to let us
know if the dispute is not resolved through IDR.
Registration

A reminder notice is sent to the applicant 35 days later. If we do
not hear from the applicant again, our file automatically closes
55 days after it was created.

If the applicant contacts us to say that the dispute did not resolve
through IDR, the dispute will progress to our “acceptance” stage.

If a dispute is urgent, it will skip the registration process as if
there has already been an opportunity for IDR. This applied in
exceptional circumstances only. An example is where legal
proceedings have been commenced. In this situation, an
expedited dispute resolution process is used.
Registration

Around 70% of disputes that are registered resolve at this stage.

The only assessment of jurisdiction which occurs at the
registration stage is whether a dispute relates to current FOS
member.

All other jurisdictional assessments are made at the next stage –
“acceptance”.
Acceptance

At the acceptance stage, an unresolved dispute is allocated to a case
worker for review of whether the dispute is within our Terms of Reference

When a dispute enters the acceptance stage, we send the financial
services provider an e-mail providing details of the dispute and explaining
the process. No action is required by the financial services provider at
this stage.

Any required information or documentation is requested from the
applicant.

If a dispute is assessed as being within Term of Reference, it then
progresses to the Case Management stage.
Case Management
Case
Management

At this stage, the disputes are reviewed and considered and further
information may be obtained from the parties and exchanged.

Dispute resolution methods such as negotiation, conciliation and merits
assessment may be used to resolve disputes where appropriate.

Where a dispute remains unresolved, a detailed investigation will take
place in preparation for a written decision (referred to as a
Recommendation or Determination) to be made.

However, negotiation and conciliation may still be used at this stage to
achieve a resolution.
Case Management
ae
Management

If dispute is not resolved through negotiation,
conciliation or initial merits assessment, next step is for detailed
investigation to commence, resulting in a Recommendation or
Determination

Most unresolved FOS disputes will proceed to a Recommendation first,
unless criteria to expedite a Dispute direct to Determination is met:
•
•
•
Urgent disputes
Disputes unlikely to resolve through Recommendation
No response received from FSP
Outcome

Outcome is the final dispute resolution stage where:
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disputes resolved by agreement are closed;
–
disputes outside our jurisdiction are closed; or
–
unresolved disputes are finalised by Recommendation or
Determination.
Outcome - Recommendation

A Recommendation is a decision made by a Case Manager. When a
Recommendation is made by FOS, it will:
–
be in writing;
–
set out a summary of the Applicant’s claim and the issues in dispute;
–
set out the FSP’s response to the claim and the issues;
–
outline the information and documentation relied upon to reach a view on the merits;
and
–
outline the case manager’s view on the merits and reasons.
Outcome - Recommendation

Both parties have 30 days to accept or reject the Recommendation.
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If the Recommendation is accepted by both parties then we close our file

If the Recommendation is rejected by the FSP or the Applicant, the
dispute will proceed to Determination.

If the FSP accepts the Recommendation, but the Applicant neither
accepts nor rejects the Recommendation, we close our file and the FSP
is not bound by the Recommendation
Outcome - Determination

When a Determination is made by FOS, it will:
–
be in writing;
–
provide a summary of the dispute;
–
outline the issues in dispute; and
–
set out the decision made by the Ombudsman/Panel and the reasons for the decision.
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The Applicant has 30 days to accept the Determination.

If it is not accepted by the Applicant within 30 days, the FSP is not bound
by the Determination.