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Glossary

Average Length in Resolution
The Average Length in Resolution is a measure of how far through FOS’s process (i.e. to what level of escalation) the disputes about this type of product from this financial services provider (FSP) went before being resolved. It covers disputes that were resolved between 1 July 2010 and 30 June 2011 (even if they were brought to FOS before the start of this period). Disputes that FOS handled in this period but had not been resolved before 30 June 2011 have been excluded.

The Average Length in Resolution for a particular FSP in a particular table =


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The ‘closed status value’ of a dispute indicates the stage in the process at which the dispute was resolved. The stages at which a dispute can be resolved and the corresponding closed status values are as follows:

  • Acceptance (closed status value = 1). At the Acceptance stage, FOS checks that the dispute falls within its jurisdiction. A dispute is resolved at Acceptance if the FSP resolves the dispute directly with the consumer while FOS is making its assessment about jurisdiction.
     
  • Before Review (closed status value = 2). After FOS accepts a dispute, we give the FSP 21 days to either resolve the dispute directly with the consumer or provide a response about the dispute to us. A dispute is resolved before review if the FSP resolves the dispute directly with the consumer during the 21 days.
     
  • At Review (closed status value = 3). After the FSP sends a response to FOS about the dispute, FOS sends the response to the consumer. A dispute is resolved at review if the consumer accepts the FSP’s response and agrees to end the dispute.
     
  • Negotiation/ Conciliation/ Assessment (closed status value = 4). After FOS has received the FSP’s response to the dispute and sent it to the consumer, we will try to resolve the dispute using negotiation, conciliation or an initial assessment of the case. A dispute is resolved at negotiation/ conciliation/ assessment if the FSP and the consumer reach an agreement through one of these methods.
     
  • Recommendation (closed status value = 5). If a dispute is not resolved through negotiation, conciliation or an initial assessment of the case, then FOS will investigate the case further and write a formal Recommendation. A dispute is resolved at Recommendation if the consumer and the FSP accept FOS’s decision.
     
  • Determination (closed status value = 6). If either the consumer or the FSP rejects FOS’s Recommendation, FOS will make a final written Determination. This will be done by either an Ombudsman or by a Panel appointed by the Chief Ombudsman. If the consumer accepts the Determination, it is binding on the FSP.

Here is an example of how the calculation is done:

FSP X had 11 disputes closed at Acceptance and 2 disputes closed at Determination.
 

Therefore, for FSP X, the Average Length in Resolution


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Please note that:

  • Disputes that were resolved during the Registration stage of our process have been excluded. During the Registration stage we refer a dispute to the FSP and give them an opportunity to resolve it using their internal dispute resolution (IDR) process. Also excluded are disputes found to be outside our Terms of Reference (OTR) and disputes that were discontinued at the Acceptance stage in the resolution process.
     
  • The Average Length in Resolution is not a measure of how much time it took for FOS to resolve disputes involving this FSP. The stages of our process do not last for set periods of time, and some disputes are fast-tracked through our resolution process – for example, a dispute about an especially serious matter might be immediately handled by a FOS Ombudsman or Panel.
     
  • For some FSPs in some tables, the Average Length in Resolution is blank. This means that no disputes involving this FSP in this product group were resolved between 1 July 2010 and 30 June 2011. In other words, all the disputes were still being handled by FOS at the end of the period. These disputes will be included in the data we use to calculate the Average Length in Resolution figures for FSPs in the 2011–2012 Comparative Tables.

On our website you can find more detailed information on our resolution process. We also provide free E-Learning Modules that explain the process.


Business Size
The tables for Managed Investments and Superannuation include a Business Size column that is not in the other tables.

These two tables may include:

  1. Financial services providers (FSPs) that only provide advice about products
  2. FSPs that only provide products, and
  3. FSPs that provide both advice and products.

Because of the difficulty of comparing these different kinds of businesses, we have developed special Business Size categories for these two product groups. Here are the categories and the criteria for applying them to FSPs:

Small
FSP has less than 20 representatives (reps) or less than $100 million funds under management (FUM)

Medium
FSP has 20 to 199 reps or $100 million or more but less than $1 billion FUM

Large
FSP has 200 to 999 reps or $1 billion or more but less than $20 billion FUM

Very large
FSP has 1,000 reps or more or $20 billion FUM or more.

If a member has both advisors and funds under management (FUM) then they will go into whichever is the larger of the categories they qualify for. For example, if a member had $2 billion FUM and 1,200 reps they would be described as very large.


Chance of a Dispute Coming to FOS
The Chance of a Dispute Coming to FOS is a measure of how likely a consumer was to come to FOS with a dispute about this type of product from this FSP between 1 July 2010 and 30 June 2011.

The Chance of a Dispute Coming to FOS =


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As the formula shows, the Chance figure measures the number of disputes relative to the size of the FSP’s business in the product group. This ensures that comparisons can be made between FSPs of different sizes.

For example, for the product group Home Contents Insurance, the Chance of a Dispute Coming to FOS is measured in terms of the number of disputes about an FSP relative to the number of home contents insurance policies the FSP has.
 

The following rules were followed in calculating the Chance of a Dispute Coming to FOS:

  • Business size was based on the number of in-force accounts or policies at 30 June 2010), as provided to FOS by each FSP.
     
  • Combined or linked accounts or policies were counted once for each product. For example, a linked home loan account, offset account and credit card account was counted as three accounts. The reason for this approach is to identify, or count, each product for which a dispute could be brought to FOS.
     
  • Jointly held accounts/policies were counted only once. For example, a home loan in the names of two people was counted as one account.
     
  • A case FOS handles that is about multiple products will be counted as one dispute for every product it is about – click here for further explanation of the way we count disputes.

If an FSP listed in a Comparative Table did not send us data on the size of their business in that product group, we could not calculate the Chance of a Dispute Coming to FOS for this FSP. We have instead stated the actual Number of Disputes consumers brought to FOS about this FSP in this product group between 1 July 2010 and 30 June 2011.


Confirming FSP offer
A FOS decision (see below) is made confirming the FSP offer if FOS decides that the original offer the FSP made to the consumer in an effort to resolve the dispute was fair.


Financial Services Provider (FSP)
A financial services provider is a provider of financial services that is a member of FOS. You can see a List of FOS’s Members on our website. Financial services include credit accounts and loans, deposit accounts, insurance policies, superannuation and investment products, and payment systems. Refer to our Terms of Reference for more information.


FOS decision
A FOS decision is made if the consumer and the FSP are unable to agree on a resolution to their dispute, even with the help of FOS conciliation or negotiation. FOS will make a formal written decision, based on its assessment of the case. The decision will take into account all the information provided by the parties, what is fair in the circumstances, and any relevant laws and industry codes of practice. A FOS decision can take the form of either a Recommendation or a Determination.

For some FSPs in some tables, all three FOS decision categories are blank. This means that for this FSP in this product group, no disputes required a FOS decision between 1 July 2010 and 30 June 2011.

On our website you can find more detailed information on our resolution process. We also provide free E-Learning Modules that explain the process.


In favour of applicant
A FOS decision is made in favour of the applicant if FOS decides that the applicant (i.e. the consumer) has suffered a loss that the FSP was partly or fully responsible for and that the FSP should pay compensation or make amends in some other way.

FOS might award partial or full monetary compensation or non-monetary compensation. FOS can also require the FSP to take some action (such as changing the terms of a loan or other contract). FOS will seek to remedy the situation by putting the applicant in the position they would have been in if they had not suffered the loss caused by the FSP.


In favour of FSP
A FOS decision is made in favour of the FSP if FOS decides that the FSP was not responsible for any loss suffered by the consumer. The FSP will not have to pay compensation or take any other action. The consumer, if they are unhappy with FOS’s final decision (called a Determination), can still take legal action regarding the matter.


Median
The median is the middle point – half of the FSPs in the table are above it and half fall below it.


Number of Disputes
Number of Disputes is the number of disputes consumers brought to FOS about this FSP in this product group between 1 July 2010 and 30 June 2011. The Number of Disputes is only listed for those FSPs that did not send us data on the size of their business in this product group. For these FSPs, we could not calculate the Chance of a Dispute Coming to FOS.


Other outcome
A dispute can be classified as ‘other outcome’ if the dispute is resolved between the FSP and the applicant without FOS being notified, if it is withdrawn by the applicant, or if it is discontinued beyond the Acceptance stage in the resolution process.


Outcomes of the Resolution Process
The Outcomes of the Resolution Process figures give a breakdown of the outcomes of the disputes about an FSP in a product group that were resolved between 1 July 2010 and 30 June 2011.

There are three main types of result: (1) a dispute can be resolved by agreement if the two parties can work out a resolution that they are both satisfied with; (2) a dispute can be resolved through a FOS decision, a formal written assessment of the case; or (3) a dispute can be classified as ‘other outcome’ if the dispute is resolved between the FSP and the applicant without FOS being notified, if it is withdrawn by the applicant, or if it is discontinued beyond the Acceptance stage in the resolution process.

For some FSPs in some tables, every outcome category is blank. This means that for this FSP in this product group, no disputes were resolved between 1 July 2010 and 30 June 2011. Disputes that were still open at 30 June 2011 will be included in the data we use to calculate the Outcomes of the Resolution Process figures for FSPs in the 2011–2012 Comparative Tables.

On our website you can find more detailed information on our resolution process. We also provide free E-Learning Modules that explain the process.


Primary Business
Many financial services providers (FSPs) sell various types of financial products. This column states an FSP’s primary business, as identified by the FSP itself.


Product Group
We divided all the products and services our members provide into the 21 product groups. See the FAQs for a list of the product groups and the specific products that fall within each product group.


Resolved by agreement
A dispute is resolved by agreement if the consumer and the FSP work out a resolution to the dispute that they are both satisfied with. They can achieve this either by dealing directly with each other or by using FOS’s resolution methods (such as conciliation, negotiation and assessment). A formal FOS decision is not required in these cases.