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15 August 2016
 
Financial Ombudsman Service and related process

Following please find information regarding the Financial Ombudsman Service (FOS) and our process around this service:

What is FOS?
The Financial Ombudsman Service (FOS) is a dispute resolution for customers who are unable to resolve complaints with their financial service provider.

Why is Debitsuccess a member of FOS?
Under the Corporations Act 2001, a person who carries on a financial services business in Australia must hold an Australian Financial Services Licence (AFS Licence).
 
To hold an AFS Licence you must have a membership with an Australian Securities and Investments Commission (ASIC) approved external dispute resolution scheme.
 
Debitsuccess is a member of FOS in order to satisfy this requirement. 


What happens when a customer complains to FOS?
The customer lodges a dispute and FOS registers the dispute upon receipt.  
 
Before FOS begins its investigation, they provide a referral period for Debitsuccess to resolve the matter directly with the customer.
 
If the case remains unresolved after the referral period, it is referred to a FOS case worker for case management.  In most cases a single FOS staff member is appointed to the case.  Case conferences and conciliation calls may take place in more complex cases in order to agree on terms of settlement.

How does this work with Debitsuccess?
Based on the approach above, there are two processes:
 
Stage 1: Dispute registration (FOS fee incurred = $70)

A customer lodges a dispute with FOS and provides ‘dispute information’ including a dispute summary and their requested outcome.  
 
FOS sends this information to Debitsuccess and gives us a timeframe in which (Debitsuccess) must either:

 
  1. Contact the customer and try and come to a resolution, or
  2. Respond with an outline of our position.  

If we reach a resolution with the customer and both parties advise FOS the dispute is resolved, the case is closed and no further charges ensue.

Stage 2: Case management (FOS fee incurred = $700 - $3150)
 
If a resolution is not reached and the parties are still at a difference then the case is escalated to Case Management level.  
 
FOS will request extra information and documentation in order to better understand the dispute and commence an investigation.  The level of complexity and input required by FOS will determine the fee charged, with fees starting at $700.


Who pays for FOS?
The industry is responsible for all FOS costs.  ASIC requires the service provider to provide an external disputes resolution procedure free of charge to any complainant.  
 
This means that costs may not be recovered from the customer.


What does this mean?
For every dispute registered with FOS a $70 fee is incurred.  The relevant Debitsuccess account manager will forward you the dispute summary, ask for your position on the matter and how you would like to respond.  There is a deadline associated with this so it is important that we receive a timely response.
 
You may agree to the customer’s requested outcome or contact the customer and attempt to discuss the matter and negotiate a resolution.  Alternatively, responding with your opposing position will escalate the matter to case management and incur a $700 fee, with the potential for fees to escalate depending on the input required from FOS.
 
Debitsuccess will absorb the costs of the FOS dispute when the matter relates to our provision of service.  However when the dispute is relative to the facility’s services, we will leave the decision with you to consider options around pursuing the matter and will look to recover the costs as per the terms of your management agreement. 


What cases should be pursued?
It is important to consider the merits of the dispute, along with the financial implications of pursuing it.  As noted, to pursue a case a minimum fee of $700 will be incurred.  
 
Given this, on occasions there are less than ideal situations where pursuing the matter and incurring fees may outweigh any benefit.  It is key to evaluate this prior to making a decision.  As a rule of thumb we generally advise against pursuing disputes that have a value less than $700.


Further information
For further information please visit https://www.fos.org.au/ or contact your Debitsuccess account manager.
 
Copyright © 2016 Debitsuccess, All rights reserved.

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