Dispute handling process in detail

The new Financial Ombudsman Service Terms of Reference (TOR) set out our jurisdiction to deal with disputes received from 1 January 2010. At the same time we are introducing a new dispute resolution process for all of our disputes, irrespective of the nature of the dispute.

As a result, there are changes to procedures relating to the new TOR and dispute resolution process which you need to know. How the changes will affect you may depend to an extent on your previous dealings with us. However, the effect of the new process will result in the same dispute resolution procedures and case costs, irrespective of which of our specialised teams handles the dispute.

Will these procedures apply to existing disputes received by the Financial Ombudsman Service before 1 January 2010?

No – disputes that were received by us before 1 January 2010 will continue to be dealt with under the previous procedures and in accordance with the applicable TOR.

What stages will a dispute go through under the new Financial Ombudsman Service process?

There are four stages in the new process that a dispute may go through when it is received by us:

1.  Registration

We check whether the Financial Services Provider (FSP) has been contacted by the Applicant and has had an opportunity to resolve the dispute. If it hasn’t, we refer the dispute to it. When we refer the dispute to the FSP we provide them with a short summary of the dispute and outcome sought by the Applicant. This information is normally provided to the FSP by email. The FSP will have 45 days to resolve the dispute from when the Applicant first contacted the FSP or from when it was referred by us. Shorter timeframes may apply where the dispute relates to financial difficulty concerning a credit facility.

2.  Dispute Lodgement – Acceptance

If the FSP has not been able to resolve the dispute through its Internal Dispute Resolution (IDR) process, the Applicant must contact us. When the Applicant informs us that they wish us to deal with their dispute, we will assess whether we can deal with the dispute under our TOR.

3.  Case Management

We review and consider the dispute and try to resolve it by mutual agreement. We may use alternatives such as conciliation or negotiation where appropriate. If a dispute cannot be resolved by mutual agreement we will conduct a detailed investigation and may offer an initial view on the merits of the dispute if it is likely to assist the parties to reach a resolution. In most instances we will issue a Recommendation. If a Recommendation is not accepted by either party, a Determination can be made.

4.  Outcome

We finalise disputes at the Outcome stage. Disputes may be finalised because they have been resolved by agreement, as a result of a decision on the merits, or they may fall outside our TOR.

Where a decision on the merits is needed to resolve the dispute, in most instances we will issue a Recommendation. If a Recommendation is not accepted by either party, a Determination can be made.