Dispute resolution schemes (internal and external)
All financial service providers that are members of the Financial Ombudsman Service (FOS) or the Credit Ombudsman Service (COSL) are required to have an Internal Dispute Resolution (IDR) procedure for handling customer complaints. ASIC also requires licensed financial service providers to have a documented IDR process (see ASIC Regulatory Guide 165).
If a consumer is unhappy with a financial, insurance or investment product or service, they can complain to the FSP and ask it to resolve their dispute in accordance with its IDR process.
If the consumer is not happy with the response received, they can contact the relevant Ombudsman who offers free (to consumers) independent and confidential conciliation processes (EDR). Alternatively, the Ombudsman may investigate the dispute and issue a written decision. Once an application is lodged with the Financial Ombudsman, the FSP cannot commence legal action against the older person until EDR has taken place.
Financial Ombudsman Service (FOS)
The Financial Ombudsman Service’s jurisdictional limits (disputes involving over $500,000 and compensation over $280,000) may restrict the outcomes it can provide. If the older person is seeking to have security over their home released, FOS may not be able to make that award if the mortgage secures a principal debtor’s liability over $280,000. But FOS may still be able to negotiate a resolution of a debt where the debt is greater than $280,000 as long as the parties agree.
See also FOS Circulars.
Credit Ombudsman Service (COSL)
As with FOS (above), the Credit Ombudsman Service Ltd provides consumers and financial service providers with an accessible and independent dispute resolution service as an alternative to legal proceedings for resolving complaints with a participating financial service provider.