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Philip Field - Financial Ombudsman Service

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Chris Davey

This document summarizes updates from the Financial Ombudsman Service (FOS). It discusses how FOS has significantly reduced its backlog of disputes, introduced faster resolution processes like expedited determinations and a fast track pilot program, and plans to further streamline the dispute process. It also outlines proposed changes to FOS' Terms of Reference relating to these process changes, flexibility of objection timeframes, compulsory joinder of additional financial services providers, and allowing asset sales in some cases.

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FOS Update Credit Law Conference 2014 Philip Field, Lead Ombudsman Banking & Finance
Highlights l New disputes received steady l Backlog significantly reduced l Further process changes ahead l Terms of Reference changes
Backlog Strategy l Project 500 has reduced the backlog from over 750 unallocated disputes to 33 in the queue last week l Achieved through greater use of expedited Determinations, where appropriate l Plain English Foundation templates for Recommendations and Determinations are faster to produce and increase stakeholder satisfaction
Process changes ahead l Fast Track process pilot for single issue banking disputes under $10,000 l Adjudicators hold a telephone conference call and issue a decision shortly after if not resolved l Aim to resolve in 60 days from entering fast track process
Dispute Process Redesign l Two step lodgement process to be replaced with a one step process l One last chance to resolve at IDR, even if it has been there before l We aim to reduce the number of steps and touch points should the dispute remain unresolved l Redesigned process to be implemented by 1 July 2015
Financial Difficulty Enhancements l Reducing the number of times a file changes hands l Earlier assessment of possible options and outcomes l Trialling a financial difficulty liaison officer to assist in gathering statement of financial position l Conciliation conference outcomes to be recorded by FOS and sent to the parties as evidence of the agreement reached
Terms of Reference changes l The Board has approved changes to the Terms of Reference l The proposed changes have been submitted to ASIC for approval l The changes are designed to support the process changes l Changes will be supported by more information in the Operational Guidelines
Terms of Reference changes l At this stage, these changes will commence on 1 January 2015 for disputes lodged after that date l Formalise the Adjudicator role in the Fast Track Process l Outside Terms of Reference objection time frames will be more flexible For example, if there is clearly a judgment, then the objection time frame will be 7 days instead of the present 30 days
New Small Business Limit l The Service may not consider a Dispute ... about debt recovery against a Small Business where the contract provides for a credit facility of more than $2,000,000 l The amended wording ensures we do not exclude disputes that have little to no connection to the value of the facility.
Agents charging a fee for service l FOS will have a discretion not to accept or continue with a dispute where: a remunerated agent is engaging in inappropriate conduct which is not in the best interest of the Applicant, or the Dispute is not accompanied by information required by FOS
Discretion to allow asset sale l Clause 13.1(b)(ii) allows an FSP to freeze or otherwise preserve an asset on such terms as FOS requires. l This clause will be amended to also allow FOS to agree to the subsequent sale of the asset l Operational Guidelines to be developed, but generally wont apply to a persons primary place of residence.
Compulsory Joinder? l At present we can deal with disputes about multiple FOS members by asking the Applicant to lodge a separate dispute against that member l We are consulting on whether to allow FOS to add an FSP without the Applicant agreeing l Submissions due by 17 October 2014
Proposed 7.4 Joining other parties a) FOS may allow or require another Financial Services Provider to be joined as a party to a Dispute if it would lead to a more efficient and effective resolution of the Dispute. b) A Financial Services Provider who has been joined as a party to a Dispute has all the rights and duties under these Terms of Reference as if they were the Financial Services Provider that the Applicant initially lodged their Dispute against.
Relevant information l All prior Bulletins in relation to Financial Difficulty and Responsible Lending have now been consolidated into a series of plain English articles the FOS Approach.
FOS contact details l Telephone: 1300 78 08 08 l Website: www.fos.org.au l Mail: GPO Box 3 Melbourne Victoria 3001

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Philip Field - Financial Ombudsman Service

  • 1. FOS Update Credit Law Conference 2014 Philip Field, Lead Ombudsman Banking & Finance
  • 2. Highlights l New disputes received steady l Backlog significantly reduced l Further process changes ahead l Terms of Reference changes
  • 3. Backlog Strategy l Project 500 has reduced the backlog from over 750 unallocated disputes to 33 in the queue last week l Achieved through greater use of expedited Determinations, where appropriate l Plain English Foundation templates for Recommendations and Determinations are faster to produce and increase stakeholder satisfaction
  • 4. Process changes ahead l Fast Track process pilot for single issue banking disputes under $10,000 l Adjudicators hold a telephone conference call and issue a decision shortly after if not resolved l Aim to resolve in 60 days from entering fast track process
  • 5. Dispute Process Redesign l Two step lodgement process to be replaced with a one step process l One last chance to resolve at IDR, even if it has been there before l We aim to reduce the number of steps and touch points should the dispute remain unresolved l Redesigned process to be implemented by 1 July 2015
  • 6. Financial Difficulty Enhancements l Reducing the number of times a file changes hands l Earlier assessment of possible options and outcomes l Trialling a financial difficulty liaison officer to assist in gathering statement of financial position l Conciliation conference outcomes to be recorded by FOS and sent to the parties as evidence of the agreement reached
  • 7. Terms of Reference changes l The Board has approved changes to the Terms of Reference l The proposed changes have been submitted to ASIC for approval l The changes are designed to support the process changes l Changes will be supported by more information in the Operational Guidelines
  • 8. Terms of Reference changes l At this stage, these changes will commence on 1 January 2015 for disputes lodged after that date l Formalise the Adjudicator role in the Fast Track Process l Outside Terms of Reference objection time frames will be more flexible For example, if there is clearly a judgment, then the objection time frame will be 7 days instead of the present 30 days
  • 9. New Small Business Limit l The Service may not consider a Dispute ... about debt recovery against a Small Business where the contract provides for a credit facility of more than $2,000,000 l The amended wording ensures we do not exclude disputes that have little to no connection to the value of the facility.
  • 10. Agents charging a fee for service l FOS will have a discretion not to accept or continue with a dispute where: a remunerated agent is engaging in inappropriate conduct which is not in the best interest of the Applicant, or the Dispute is not accompanied by information required by FOS
  • 11. Discretion to allow asset sale l Clause 13.1(b)(ii) allows an FSP to freeze or otherwise preserve an asset on such terms as FOS requires. l This clause will be amended to also allow FOS to agree to the subsequent sale of the asset l Operational Guidelines to be developed, but generally wont apply to a persons primary place of residence.
  • 12. Compulsory Joinder? l At present we can deal with disputes about multiple FOS members by asking the Applicant to lodge a separate dispute against that member l We are consulting on whether to allow FOS to add an FSP without the Applicant agreeing l Submissions due by 17 October 2014
  • 13. Proposed 7.4 Joining other parties a) FOS may allow or require another Financial Services Provider to be joined as a party to a Dispute if it would lead to a more efficient and effective resolution of the Dispute. b) A Financial Services Provider who has been joined as a party to a Dispute has all the rights and duties under these Terms of Reference as if they were the Financial Services Provider that the Applicant initially lodged their Dispute against.
  • 14. Relevant information l All prior Bulletins in relation to Financial Difficulty and Responsible Lending have now been consolidated into a series of plain English articles the FOS Approach.
  • 15. FOS contact details l Telephone: 1300 78 08 08 l Website: www.fos.org.au l Mail: GPO Box 3 Melbourne Victoria 3001