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Comparative Tables

Publication of disputes data about individual members

As part of its 2009–2010 Annual Review, FOS will be publishing disputes data about individual members. This is in accordance with new rules in ASIC Regulatory Guide 139: Approval and Oversight of External Dispute Resolution Schemes. Section 139.143 of this guide states that, ‘From 1 January 2010, schemes must also publish information about complaints and disputes received and closed, with an indication of the outcome, against each scheme member in their annual report’.

FOS will be publishing this new data in a series of comparative tables on our website. We identified 21 product groups that cover all the various types of product and service that our members provide. There will be a comparative table for 20 of these 21 product groups. This is because there is insufficient data to produce a table for one of the groups, professional indemnity insurance.

So that the data we publish is statistically meaningful, each comparative table will only list the members with five or more disputes brought to FOS over 12 months in that product group. For this year’s Annual Review, we are only using data relating to a six month period, January to June 2010 (in line with ASIC Regulatory Guide 139). Consequently, this year’s data will be annualised to give us numbers that are equivalent to a full year’s results. In future Annual Reviews we will be working with data from 12 months, so we will not need to annualise the data.

The value of the data

Publication of the disputes data should benefit both our members and consumers.

Members will be able to see how their disputes performance compares to that of other financial services providers (FSPs). They will be able to set targets to improve their performance and check their progress in future sets of comparative tables. The comparative tables will be published each year as part of our Annual Review and will also form part of our quarterly reports to members.

One of FOS’s company objects, as stated in our Constitution, is to ‘protect, promote and advance the Industry’s dispute resolution procedures and standards’. We hope that the publication of disputes data about individual members will act as a stimulus and a benchmarking tool for FSPs aiming to improve their internal dispute resolution systems.

Consumers will be able to find out how likely other consumers were to bring a dispute to FOS about a particular product or service provided by a particular FSP. They will also be able to see the outcomes of disputes at FOS. So the data will help inform consumers about which businesses they may wish to buy products from and bringing a dispute to FOS.

Innovative approach

We consulted our members and other stakeholders in the first half of 2010 while we developed our approach to the publication of the data. Our members will be providing us with some data on their businesses to help us to contextualise the disputes data. The approach we have arrived at is quite innovative and, we believe, very fair, transparent and useful. Two key aspects of our approach are worth emphasising.

We are displaying the data in product groups
FOS will not be providing a global picture of the disputes performance of particular members. We are publishing tables for specific product groups. We believe this is the fairest and most meaningful way of presenting the information.

Some FSPs operate across many product groups, and their disputes performance may be excellent in some product groups and less impressive in others. These FSPs – and their customers – will learn a lot more from seeing the data for specific product groups than from seeing global totals that may hide variation across product groups.

We are relating dispute numbers to business size
We are not specifying the number of disputes brought to FOS for individual members in a product group. We are giving the number of disputes for an FSP in that product group relative to the size of the FSP’s business in that product group. This approach ensures that fair comparisons can be made between FSPs of different sizes.

The size of an FSP’s business will be measured in terms of the number of accounts or policies the FSP held for all products in a product group at the start of the reporting period (30 June 2009).

The preparation process

The publication plan for the tables, which showed the intended design and the explanatory text that will accompany them, was sent to our members in early September. Since then, we have extracted the raw data for the tables from our databases and identified which of our members will appear in which comparative tables.

In October 2010 we emailed the members who will appear in any of the tables and asked them to provide data about the size of their business in the relevant product group/s. The data is the number of relevant accounts or policies the member has for all of the products in the product group. We have set up an online form to make it easy for members to supply the data. Members supplied this data in November 2010.

Once we have received all the business size data from members, we can complete the tables. In December we will send our members copies of the tables that they will appear in to review. These members will be required to keep the tables and the data they contain confidential until they are published by FOS.

We are planning to publish the comparative tables, as part of our full Annual Review, in January 2011.