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Issue 19 - November 2014

Fast, efficient, fair dispute resolution

 

We are continuing to consult with our stakeholders and have piloted initiatives to deliver on our promise to resolve disputes in more a timely, efficient and fair manner.

Since the last issue of the Circular, to achieve this goal we have:

  • piloted a new approach with a limited number of financial difficulty disputes
  • introduced a Financial Information Officer for a trial period to assist with financial difficulty disputes
  • extended the fast track pilot to General Insurance (GI) disputes
  • refined and finalised changes to the Registration and Referral and other stages of the dispute process
  • communicated the response by the FOS Board on the proposed Terms of Reference changes.

We have also replicated the strategies behind Project 500’s success which successfully reduced the backlog of cases, to our ongoing backlog strategy to ensure we will operate without backlog by 1 January 2015.

Over the coming months we will continue to explain the changes that we make to our dispute process and how it may impact our stakeholders.

For more information on these initiatives, please click below. If you have further questions, please email dpr@fos.org.au

 

Backlog Strategy

Operating without a dispute backlog and speeding up our processes

This initiative will minimise the time it takes for a dispute to be allocated to a case worker and will also improve the quality of our dispute resolution.

This approach is delivering results. In our Specialist Resolution Group the number of disputes waiting allocation to a case worker has reduced by 86% from July 2013. Importantly, the average days a disputes is unallocated has also significantly reduced, with some teams allocating a dispute seven times faster than they would have in July 2013.

Our new format decisions have been well received and we continue to work closely with our affected stakeholders, to minimise the impact and maximise the benefits of these changes.

Fast Track Process

Fast tracking decisions for simpler and low-value disputes

The Fast Track pilot was launched in June 2014 for select Banking and Finance disputes. This approach is also delivering improvements. During June-September 2014:

  • all disputes were resolved within 60 days and 95% of disputes were resolved within 45 days
  • most disputes had only one or two case workers involved (including the decision maker)
  • these disputes had more experienced FOS case workers dealing with them earlier in the process
  • a final decision was only required for a small number of disputes

On 1 October 2014 we expanded the pilot to some GI disputes. It includes simpler, low-value disputes (under $10,000) that have limited issues, have limited documents to review, or that have a set FOS approach (for example, claims about service issues, claims from uninsured third parties, some travel insurance claims and disputes about the market value of an insured item).

A review in December 2014 will enable us to share learnings to help improve other processes.

Dispute Process Redesign

Streamlining our dispute resolution process

Following consultations and discussions with key stakeholders about the process redesign, particularly during the Registration and Referral stage, we made several refinements to this stage of the process. We released an updated paper on the changes after receiving further feedback from members and consumer groups.

The overview of the redesigned process is here.

We continue to work on technology changes based on stakeholder feedback to improve our dispute management, document exchanges and communication processes with our members and consumers. This includes developing dispute resources for financial services providers (FSPs) and applicants to assist them with their submission of dispute responses and documentation. We have also started to redevelop our online dispute form and a new electronic statement of financial position for financial difficulty disputes to make them easier to use and enhance the accessibility of FOS.

Financial Difficulty Enhancement Project

Streamlining our approach in order to achieve more timely outcomes in financial difficulty disputes

A new process
In August 2014 we implemented the first pilot trialling a new approach to financial difficulty disputes. The trial approach includes a single case worker, more targeted phone contact, more conciliations sooner and quicker results.

The benefits of the new approach are:

  • early over-the-phone engagement
  • broader use of telephone conciliation
  • enhanced assessment of repayment arrangements
  • more effective gathering of information

We have achieved positive early results, with disputes resolving within an average timeframe of 29 days. The provision of a summary of credit facilities at the commencement of the process by FSPs enables us to immediately have targeted discussions with applicants. 

The pilot has now stopped accepting disputes and a second round of stakeholder consultation will follow once outcomes have been assessed.

A clear picture of each applicant’s financial position
A second pilot – which focuses on gathering financial information from applicants as early as possible – commenced in September 2014.

FSPs which are members of FOS opt in to the pilot by volunteering disputes that present with little or no financial information. Applicants who have never prepared a Statement of Financial Position (SOFP) before, and would like help, are offered an over-the-phone appointment with a financial difficulty team member. The appointment is dedicated to the purpose of building a clear picture of the applicant’s financial difficulty, so that FOS and FSPs can identify solutions sooner.

Over-the-phone consultations to prepare an SOFP is cutting the time taken receive financial information from 3-4 weeks, to 3 days on average.

Milestone

Date

Financial Difficulty Pilot One - Process

Mid-August to end-October 2014

Financial Difficulty Pilot Two – Financial Information

September to November 2014

Assess process and information pilot results

November 2014

Share pilot results

January 2015

Refine and finalise financial difficulty process

February 2015

 

Changes to our Terms of Reference

After consultation on a range of proposed changes to our Terms of Reference, the FOS Board considered stakeholder submissions, and has now issued its response.

The Board also decided to consult with stakeholders on two additional proposed amendments to the Terms of Reference, and FOS invited feedback from all interested parties. Thank you to those of you who took part. You can read more here.

The draft Terms of Reference changes are completed and have been submitted to ASIC for final review.

Milestone

Date

Draft TOR changes and submit to ASIC for approval

October - December 2014

Finalise and release TOR and Operational Guideline changes

December 2014

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