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Issue 31 - October 2017

Annual Review and Comparative Tables published

We received 39,479 disputes in 2016-17, a 16% increase from 2015-16, as indicated in our recently published Annual Review

The increase was driven by continued growth in general insurance disputes. The number of general insurance disputes received (13,200) increased by 2,612, accounting for about 38% of the overall increase.

The increase in general insurance disputes was due to a continuation of industry-specific issues including higher claim numbers, organisational changes and the impact of Cyclone Debbie, all of which may have affected insurers’ internal dispute resolution.

Resolving disputes more quickly and efficiently
Overall, we reduced the average time taken to resolve disputes by 13% in 2016-17 and 43% from the previous year without compromising the quality of outcomes. A major challenge this year has been the increase in disputes received (from 34,095 to 39,479).

“This means that people can have their cases resolved more quickly and get on with the rest of their lives,” Chief Ombudsman Shane Tregillis said.

We resolved disputes on average in 54 days in 2016-17 compared with 62 days last year and 95 days in 2014-15. We also closed 44% of disputes within 30 days (up one percentage point from last year and double the previous year’s 22%).

The record number of disputes have put pressure on staff workloads and we saw some queues re-emerge in the second half of the year. In response to this, we have recruited additional ombudsmen and other staff to ensure we can handle the anticipated high volume of disputes we continue to receive.

Financial difficulty disputes continue to decline
Financial difficulty disputes, which occur when a consumer is unexpectedly unable to meet their payment obligations, fell again in 2016-17.

This was due to improvements that FSPs were making in managing hardship requests and complaints from customers in financial difficulty, consistently low interest rates (which had reduced repayment pressures for many borrowers), and improvements to the FOS process.

Systemic issues a key priority
A key focus again was on systemic issues. We identified and referred 192 possible systemic issues to FSPs for response and resolved 66 definite systemic issues. FSPs said more than 940,000 customers were affected by these systemic issues, leading to significant refunds and other remedies such as amendments to, or removal of, credit listings.

Improving accessibility
In 2016-17, we continued working to make our service as open and accessible as possible. As part of our work in response to the Victorian Royal Commission, we encouraged applicants to identify if family violence was a factor in their dispute. We also developed partnerships with expert services to help staff understand and help people affected by family violence and financial elder abuse.

A key achievement was completing our Reconciliation Action Plan and having it endorsed by Reconciliation Australia. The plan outlines 16 key initiatives to help make us more accessible to Aboriginal and Torres Strait Islander peoples.

What the disputes were about
FOS accepted 22,475 disputes in 2016-17. Of these, there were:

  • 10,973 credit disputes (43%)
  • 8,756 general insurance disputes (35%)
  • 1,861 deposit-taking disputes (7%)
  • 1,331 payment system disputes (5%)
  • 1,292 investments and advice disputes (5%)
  • 1,018 life insurance disputes (4%)

External dispute resolution review
We contributed throughout the year by making submissions to the Government’s review of the financial system’s external dispute resolution (EDR) and complaints framework.

We advocated that changes to current dispute arrangements should build on the proven features of the industry ombudsman model, and be designed to simplify, strengthen and increase access to timely, cost-effective and efficient EDR for individuals and small business.

The key elements of the industry ombudsman model remain at the heart of the Government’s plans for a single EDR scheme, which is to be called the Australian Financial Complaints Authority.

Comparative Tables
The Comparative Tables were published on Tuesday 10 October. The Comparative Tables provide the dispute statistics about financial services providers (FSPs) who are members of FOS. The tables cover 19 product groups and can be used by consumers and FSPs to compare dispute data for particular FSPs and financial products.