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Issue 20 - January 2015

Fast, efficient, fair dispute resolution

 

Since the last issue of The FOS Circular, we have:

  • eliminated the dispute backlog in our case management area without compromising the quality of our dispute resolution
  • introduced our new Terms of Reference and updated our Operational Guidelines
  • hosted focus groups testing of the new online dispute form and electronic statement of financial position
  • seen some significant reduction in resolution timeframes in our financial difficulty process pilot, and
  • produced a video illustrating the benefits of being a member of FOS – the important role we play in building consumer trust in their financial services provider and the financial system as a whole.

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

We ended 2014 on a high note as we reached our goal of eliminating the dispute backlog in our case management area - not only has the backlog been eliminated, but the quality of our work was maintained.

Jamie OrchardWe speak to Jamie Orchard, Executive General Manager – Specialist Resolution at FOS. He explains the work we have done in reducing our backlog of disputes at the Case Management stage.

 

  1. Describe FOS’s journey from project initiation to completion and what were some of the strategies adopted in bringing the backlog down to zero at the Case Management stage?

The independent review of FOS and other key stakeholder feedback highlighted the need for us to reduce our dispute backlogs to improve our timeliness and therefore our overall quality of service.

Project 500, launched in August 2013, was one of the first initiatives introduced to tackle the backlog and it introduced a number of productivity enhancing measures. The project was extremely successful and achieved the goal of reducing the number of unallocated disputes by 536 disputes by 30 June 2014.

From July 2014, we have been replicating the learnings from Project 500’s success as part of our ongoing backlog reduction strategy.

One particular aspect of enhancing the quality of our dispute resolution service involved reviewing the form and content of our Recommendations and Determinations. They now more effectively communicate the outcome of a dispute to applicants and financial services providers and can be produced more efficiently. All staff are now writing Recommendations and Determinations in the new style.

  1. What were some of the lessons learned?

We learnt a lot of valuable lessons through the various pilot initiatives, including:

  • profiling matters at an early stage and dedicating specialist expertise earlier in the process
  • reducing multiple touch points, resulting in quicker resolution
  • expediting decisions for certain disputes, based on their profiles and criteria, and
  • reducing the timeframes for obtaining information and recognising the importance of early consultation with financial services providers, and applicants to discuss the issues in the dispute and how the dispute would be handled.
  1. What are some of the key achievements?

We are now operating without a backlog at the Case Management stage, that is, no dispute is awaiting allocation for more than seven days. This achievement has been possible not only due to the efforts of our staff but also due to the ongoing cooperation of our key stakeholders.

The average time for allocating a disputes in our Specialist Resolution Group which looks after disputes at the Case Management stage is now four days (in July 2013 it was 89 days).As at 31 December 2014, the number of disputes awaiting allocation reduced by 98% from July 2013 with the few remaining disputes all awaiting allocation for less than 7 days.

Our new format decisions have also been well received and we will continue to enhance them as required.

  1. Where to from here?

One of our plans for 2014-2015 was to eliminate dispute backlogs across the Case Management teams by 31 December 2014. We have achieved that goal and our focus for the next few months will be to build on last year’s achievements and focus on reducing the current workloads in those teams as the new dispute processes are introduced. We will now also focus on reducing the number of disputes awaiting allocation to an Ombudsman.

  1. What does this mean for our stakeholders?

We are very excited about all of the dispute process changes that we are introducing. In the next few months, in the build up to the 1 July 2015 implementation date, we look forward to working closely with our stakeholders to ensure that the learnings from the initiatives mentioned above are effectively implemented and any future enhancements benefit all those involved in the dispute resolution process.

Fast Track Process

Fast tracking decisions for simpler and low-value disputes

In June 2014, we commenced a pilot of a new Fast Track process, on simpler, low value Banking and Finance disputes.  We expanded the pilot to include a selection of General Insurance disputes in October 2014 and as at 31 December 2014, 644 disputes had been progressed through our Fast Track process (506 in the Banking & Finance area and 138 in the General Insurance area).  511 of these are now closed, with almost all closing within 60 days and a large proportion closing even quicker, with the average being 27 days.

Whilst we are currently undertaking a detailed review of the first two phases of our pilot, the overall results and satisfaction levels from parties involved are positive and we will be incorporating a Fast Track process into our new dispute processes from 1 July 2015. Until then, we will continue with this Fast Track pilot in the Banking & Finance and General Insurance areas and may further refine the process or criteria during this period.  We will provide more information to stakeholders about our Fast Track process in the coming months.

Dispute Process Redesign

Streamlining our dispute resolution process

In addition to finalising our redesigned process, we have continued to work on a number of technology changes and enhancements to our systems.  This includes the development of a new document management system and online portal for applicants and financial services providers.

We arranged for some consumers to test and provide feedback on a prototype version of the new online dispute form and statement of financial position. We aim to complete and run a pilot of the new online statement of financial position in March 2015.

Financial Difficulty Enhancement Project

Early contact, flexible pathways, consistent decision-making

The future of financial difficulty dispute resolution
Based on the results of two successful pilot projects, key features of the new financial difficulty dispute process are ready and these enhancements will be implemented in stages ahead of the 1 July 2015 schedule:

  • Typically a dispute will be handled by a single case owner
  • Early over-the-phone engagement with dispute parties
  • Increased support and resources for applicants to assist with the preparation of financial information, including the introduction of an in-house specialist
  • Credit facilities table – the provision of a summary of credit facilities at the commencement of the process by financial services providers enables us to immediately have targeted discussions with applicants
  • Early identification of appropriate resolution pathway
  • An increased focus on the use of early telephone conciliation conferences where a financial difficulty dispute is not quickly resolved
  • The use of formal written decisions where negotiation or conciliation is inappropriate or unsuccessful.

During this staged implementation period, financial difficulty disputes lodged with an IDR response will continue to progress straight through to Acceptance. Following 1 July, broader dispute resolution process changes will apply.

Ongoing pilot projects

We know that well-prepared financial information supports sound decision-making in financial difficulty disputes. Most applicants will successfully use FOS’s electronic Statement of Financial Position (due for initial release in March 2015), however, some applicants may need help to prepare financial information. Throughout the first half of 2015 we will continue piloting support options, including an in-house specialist.

Feature

Implementation schedule

Share pilot results

January 2015

Commence staged rollout of the revised financial difficulty process

March 2015

Electronic Statement of Financial Position
(first release)

March / April 2015

 

Changes to our Terms of Reference

We released the new Terms of Reference in December 2014 following formal approval from ASIC. The changes came into effect on 1 January 2015, except two changes that will come into effect on 1 January 2016.

We have also updated our Operational Guidelines to explain these changes, and to update the explanation of a number of existing ToR provisions.

You can view the Operational Guidelines and Terms of Reference here.

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