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 won’t apply to a person’s 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