Disputes received at the registration and referral stage.
Registration and referral is the first stage in our dispute resolution process. When we register a dispute, we record the basic details and refer them on to the financial services provider (FSP).
We changed our dispute resolution process from 1 July 2015. Disputes can no longer bypass registration and enter our case management stages directly. We refer all disputes at registration and referral stage back to the FSPs to give them a final opportunity to resolve the dispute directly with their customers before the FOS investigation begins. For more information about our process, click here.
We received 8,638 disputes during the January - March 2016 quarter. Compared with the previous quarter, this is a 15% increase. Compared with the same quarter last year, this is a 4% increase. The increase from last quarter is partly due to the increase in the general insurance disputes (up by 21%).
The number of disputes received quarter on quarter at FOS is always volatile – as the graph below depicts, anywhere from -12% to +15% quarter on quarter.
Volatility is influenced by a raft of external factors, from seasonal changes, broad economic conditions, to changes in a particular industry sector.
Over the last quarter for instance, general insurance disputes received went up 21% and we are looking into factors that could have influenced this rise.
Total disputes received by product line
The majority of disputes received during the January - March 2016 quarter continued to be credit disputes (42%), followed by general insurance disputes (31%).
Note: The total number of disputes received in this table exceeds the total reported in the chart above. The total in that chart is based on counting each case, even if it is about multiple products and issues, as one dispute.
If a dispute is not resolved during the registration and referral stage, it will progress to our case management stage. If there are issues with whether we have jurisdiction to deal with the dispute, we will review these at the beginning of the case management stage. Otherwise, the dispute will be allocated to a case owner who will commence investigation and try to resolve it by either negotiation, conciliation or providing a view on the merits. For more information about our process, click here.
During the January - March 2016 quarter, we accepted 4,953 disputes. Compared with the previous quarter, this is a 4% decrease. Compared with the same quarter last year, this is a 16% decrease.
The volatility in disputes received will impact the number of accepted disputes, but with a lagged impact. While we might receive and register a dispute today, we might not accept that dispute for another 21 or 45 days (or somewhere in between). The March quarter’s rise in received disputes was particularly influenced by disputes received in March itself, and if FSPs are not successful in resolving these with dispute applicants through their IDR processes, we would expect to see the impact of this increase in accepted dispute volumes in the June quarter.
To explain in a little more detail; a dispute received today will be referred back to the FSP to check that it has been through their IDR process. If it hasn’t, the FSP is given up to 45 days to try and resolve the dispute with the consumer, and if it has, we give the FSP an additional 21 days to have another go at resolving the dispute directly with the consumer. If resolution can’t be gained between the FSP and applicant through IDR, we then accept the dispute.
The change in our registration and referral process, as outlined above, was introduced from July 2015. This change also explains the overall drop in accepted disputes this financial year. Prior to this financial year we automatically accepted all disputes that had been through an IDR process. Now, with many FSPs taking advantage of the additional 21 days to try again to resolve the dispute with the consumer, there has been an overall drop in accepted disputes this financial year. We’d like to see the resolution rate from the additional 21 days improve even more, but it is early days.
Credit and insurance disputes make up the largest proportion of all disputes accepted. Credit disputes make up 43% of disputes accepted this quarter and insurance disputes make up 33%.
Note: The total number of disputes accepted in this table exceeds the total for this quarter in the chart above. The total in that chart is based on counting each case, even if it is about multiple products and issues, as one dispute.
We closed 7,670 disputes during the January - March 2016 quarter. This is a 2% and 10% decrease compared with the previous quarter and the same quarter last year, respectively.
Total disputes closed (by outcome)
The table below shows the outcomes of the disputes we closed in January - March 2016. Of the closed disputes, 62% were resolved through an agreement between the financial services provider and the consumer. This is consistent with the previous quarter. We closed 17% of disputes as being outside of FOS’s jurisdiction and close to 8% due to applicants deciding not to pursue their dispute(s).
We closed over 7% of disputes at the preliminary view stage, in favour of either applicant or FSP. Compared with the previous quarter, this is a 1% increase.
- All the data in this report was correct at the time of extraction.
- All the percentages in this report have been rounded to the nearest whole number. Because of this rounding, the sum of the percentages in a given table might not add to 100%.