Work on IDRs to avoid 'reputational' pain: COSL
The Credit Ombudsman has encouraged lenders and credit providers to improve their internal dispute resolution schemes to avoid the "reputational implications" of having a complaint taken to an EDR.
Speaking to a conference in Sydney, CEO and Ombudsman Raj Venga said COSL members should devote resources to internal dispute resolution schemes, as complaints taken to an EDR can impact on a member's reputation and incur financial costs. Venga said EDR schemes are required by ASIC to report annually on the number of complaints received about a particular member, and indicated that enhancing IDR resources could preclude this.
"Around 60% of complaints we receive are referred back to IDR because the member hasn't had an opportunity to address the complaint. Of those, about half are resolved internally at IDR. IDR is therefore an important complaint resolution tool that FSPs should commit resources to," Venga said.
Venga reminded COSL members that IDR schemes had 45 days in which to respond to a client complaint, and only 21 days if the complaint involved financial hardship. He said this timeframe would not recommence due to new information being provided by the complainant, and was applicable no matter who the customer addressed the complaint to.
"The timeframes also apply irrespective of whether the complaint was addressed to someone in the member's organisation who does not deal with complaints. Therefore, your non-complaints staff should be trained to refer complaints to your designated complaints person. Your designated complaints person should have sufficient authority to deal effectively with and, where appropriate, settle complaints," he commented.
Venga said the EDR had seen a 72% increase in complaints since 1 July 2010. Of these, 17.4% were resolved in favour of the complainant. However, Venga indicated 45% of financial hardship cases were resolved in favour of the complainant.