Annual Review snapshot

Transcription

1 Annual Review snapshot

2 Message from the Chief Ombudsman In what was another challenging but rewarding year for FOS, we completed a major transformation of our organisation to deliver a fair, fast and efficient resolution service while engaging more widely with stakeholders than ever before. We implemented our new dispute process, which was designed to be quicker and simpler to use for consumers and financial services providers. It enabled us to reduce average resolution times by more than one-third from 95 days last year to 62 days. Importantly, we closed almost all pre-30 June 2015 disputes by the end of this year, enabling us to now focus on those lodged under our new process. A major challenge was an unexpected and sustained 7% increase in dispute numbers received. This put pressure on our workloads and timeframes with the re-emergence of some queues. We responded by adjusting our process and moving staff across the organisation to where they were most needed. A key priority this year was on actively identifying and managing systemic issues, and this will continue in We also did a great deal to communicate with our members and the broader community, and to make our service as open and accessible as possible. FOS is focused on addressing opportunities and challenges in the external environment. We have established a team to provide information to the independent panel that will be reviewing external dispute resolution. This is a significant development in the sector, highlighting the role that access by consumers to FOS and external dispute resolution plays in ensuring fair outcomes for consumers, and supporting trust in financial services. I would like to thank all FOS staff for their efforts, professionalism and commitment over the past 12 months, and acknowledge the support of the Board and our stakeholders. I consider we have strong foundations in place as we continue our efforts to improve the important service we provide to the Australian community. Shane Tregillis Chief Ombudsman 2 Message from the Chief Ombudsman

3 How our new dispute process worked in its first year REGISTRATION AND REFERRAL Applicants lodge disputes with FOS Disputes received Has the FSP had an opportunity to complete its IDR process? NO YES 45 days We refer the disputes to the FSP Closed Disputes closed at IDR 21 days We refer the disputes to the FSP Closed Disputes closed post IDR CASE MANAGEMENT Disputes progressing to Case Management (accepted disputes) Accepted disputes include disputes received before 1 July 2015 Fast Track Standard Complex Terms of Reference Totals Number of disputes accepted 7,008 5,630 2,662 4,937 20,298 % of total disputes accepted Average number of days to close disputes As at 30 June 2016, 61 accepted disputes were yet to be streamed FSP = financial services provider IDR = FSP s (own) internal dispute resolution process Meeting the needs of our stakeholders Our new dispute process, introduced on 1 July 2015, is designed to meet the needs of applicants and FSPs by delivering fair, fast and efficient dispute resolution. A key change was the introduction of Registration and Referral the first stage of our new process. Here we refer all disputes that we initially receive to FSPs to provide them with a final opportunity to resolve the matter directly with their customers. So the number of disputes we accepted in cannot be compared with the number accepted last year and in previous years because our processes were different. More of the disputes we receive are now resolving earlier and quicker in Registration and Referral, rather than being accepted and progressing to Case Management. How our new dispute process worked in its first year 3

4 at a glance PERFORMANCE COMPARED WITH LAST YEAR Total disputes received Total disputes closed 34,095 7% up down 32,871 5% Financial difficulty disputes accepted Systemic issues resolved New investigations of alleged breaches of industry codes of practice 2,875 30% down Number of members Licensees: 5,540 up 14% Phone calls handled by our contact team 214,439 up 1.9% Authorised credit representatives: Visits to our website 8,036 down 13% 600,046 down <1% at at a glance a glance

5 Key facts and statistics Disputes received FOS received 34,095 disputes in This was an unexpected 7% increase from last year, going against the trend of stable dispute numbers in the past three years. This increase in disputes received was driven by industry-specific issues in general insurance. The number of general insurance disputes received increased by 1,721, almost 90% of the overall increase in disputes received, returning to the levels of when these numbers were affected by several major natural disasters. The vast majority (94%) of our 13,576 members did not have any disputes lodged against them in When members did have disputes lodged against them, most (42%) had only one dispute. Total disputes received by year (case count) 40,000 36,099 35,000 30,000 30,283 32,307 31,680 31,895 34,095 25,000 20,000 15,000 10,000 5, Key facts and statistics 5

6 Accepted disputes by product line Accepted disputes are those that have entered the Case Management stage of our dispute resolution process. In , credit disputes accounted for 47% of all accepted disputes (49% last year), followed by general insurance with 31% (26% last year). Accepted disputes by product line in Life insurance 5% Traditional trustee services <1% Investments and advice 5% Payment systems 5% Deposit taking 7% Credit 47% General insurance 31% 6 Accepted disputes by product line

7 Disputes closed In , FOS closed 32,871 disputes, 5% less than last year. A dispute can be closed: through an agreement between the parties involved through a decision made by FOS because the dispute is discontinued or outside our Terms of Reference. Of all the disputes we closed in , more than one-third (37%) were closed during Registration and Referral and almost two-thirds (63%) closed after they were accepted into Case Management. Total disputes closed by year Total 36,049 33,773 33,450 34,714 32,871 Dispute outcomes The proportion of disputes closed by agreement between the applicant and the FSP continued the reduction of recent years, from 63% last year to 61%. The proportion of disputes resolved through a FOS decision because an agreement could not be reached was 15% compared with 13% last year. Collaborative resolutions are quicker and cheaper than resolutions achieved through a formal decision by FOS. They can be tailored to the specific facts of the dispute and are also more likely to maintain, or even improve, relationships between the consumer and their FSP. Time taken to close disputes In , we closed more than 4 in 10 disputes (43%) within 30 days. This is an increase of 21 percentage points over last year (22%) and 25 percentage points over the previous year s 18%. We closed more than three-quarters (77% compared with 61% last year) of disputes within 60 days and 85% (72% last year) within 90 days. We cut the average time to close disputes to 62 days compared with 95 days last year, a reduction of more than one-third (35%). In addition, of those disputes lodged before 1 July 2015, we have now closed 99.6%. Reducing the time taken to close disputes was a key objective of our new dispute process, and continues to be a priority for FOS. Disputes closed 7

8 Systemic issues and serious misconduct The Systemic Issues Team received 1,635 referrals of possible systemic issues from FOS dispute handling teams in (compared with 2,137 last year). This included multiple referrals of the same issues. From those 1,635, the team identified and referred 129 possible systemic issues to FSPs for response (173 last year), and resolved 64 definite systemic issues (52 last year). Outcomes of systemic issues resolved this year included: refunds of more than $12.75 million (in some cases the issues identified from FOS disputes may have already been remediated by the FSP or been subject to ASIC involvement) amendment or removal of more than 4,500 credit listings. In addition, improvements were made to online banking processes and platforms and disclosure of interest payable on various savings products, fees were refunded, claim denials were reconsidered by insurers, and client investment portfolios were reviewed. We reported 5 cases of serious misconduct to ASIC in compared with 14 last year. Code compliance and monitoring The Code Compliance and Monitoring Team at FOS (Code team) supports independent code compliance committees who monitor compliance with standards set out in four industry codes of practice: the Code of Banking Practice, General Insurance Code of Practice, Customer Owned Banking Code of Practice and the Insurance Brokers Code of Practice. The Code team s work helps FSPs to continually improve their services and achieve standards people can trust. In total, 571 FSPs subscribed to the codes in , and as a result of the Code team s annual compliance work, these subscribers self-identified 11,809 breaches of Code obligations. The Code team conducted 245 new investigations into allegations that an FSP had breached one or more Code obligations, and as a result of these investigations, 75 breaches were confirmed. The Code subscribers responsible for each breach took action to remedy the non-compliance and prevent similar breaches occurring again. 8 Disputes closed

9 Stakeholder engagement FOS has a broad range of stakeholders: financial services providers (members of FOS) consumer representatives such as financial counsellors and community lawyers industry bodies ASIC and other government bodies the Australian community. Sharing our knowledge and expertise In , we worked closely with our members to help them understand our new dispute process and how to avoid disputes. Key activities included: hosting a total of 24 open forums in Adelaide, Brisbane, Melbourne, Perth and Sydney, engaging with 1,169 members explaining the benefits of external dispute resolution at 26 workshops and conferences for the accountants who need to join an external dispute resolution scheme from 1 July 2016 making a record number of policy submissions, on issues ranging from digital (robo) advice to crowdsourced equity funding working with FSPs and ASIC on major remediation schemes that compensate consumers who suffer loss. Improving accessibility As part of our work to improve the accessibility of FOS and raise awareness about us, we: attended a diverse range of 27 community outreach forums, events and engagements across the country, often in collaboration with other external dispute resolution schemes strengthened partnerships with consumer representative organisations such as community legal centres and financial counselling services built and extended relationships with agencies providing support services for newly settled migrants published a pocket-size brochure explaining our role in 14 languages. We also focused on improving staff understanding of issues that may impact on people with additional needs bringing disputes to FOS, such as mental health, family violence and literacy. Our Terms of Reference FOS operations are governed by our published Terms of Reference, which sets out the principles for how we operate, our rules and processes (see The most recent version of our Terms of Reference was released on 1 January Disputes closed 9

10 Our strategic measures Our performance against the strategic measures is summarised in the following table. Strategic focus Delivering a more efficient and effective dispute resolution service Success measures Applicant satisfaction Percentage of applicants who report a satisfactory or better dispute resolution experience at FOS. Clearance ratio A retrospective indicator that compares how many disputes we closed with how many we received. Age profile of open disputes Percentage of open disputes that are less than or equal to 180 days old. Time to close disputes The age profile of closed disputes. Disputes closed per quarter per dispute FTE This provides a measure of the dispute handling process at FOS. It does not account for changes in product type or dispute complexity. Measure overall satisfaction that FOS is meeting the needs of stakeholders. Enhancing our public role and stakeholder engagement Ensuring organisational development and sustainability Staff engagement score Survey responses measuring the level of staff engagement and alignment with our values and behaviours. Environment audit rating The National Australian Built Environment Rating System (NABERS) rating of the organisation s impact on the environment Corporate Full Time Equivalent (FTE) to total FTE The percentage of support staff (corporate) to staff directly involved in dispute resolution 15% 10 Our strategic measures

11 targets performance Implement measures to evaluate and improve the experience of applicants and FSPs in our new dispute process. Our aim is to lift overall applicant satisfaction levels as follows. Registered disputes: 95% satisfied Closed disputes: 80% satisfied Discontinued disputes: 70% satisfied Registered disputes: 87% satisfied Closed disputes: 69% satisfied Discontinued disputes: 52% satisfied 103% Clearance ratio of 103% 95% are less than or equal to 180 days old. 90% are less than or equal to 180 days old. For disputes received after 30 June 2015, 95% 180 days. For disputes received before 1 July 2015, 100% closed by 30 June % of disputes accepted after 30 June 2015 closed 180 days. 99.6% of disputes accepted before 1 July 2015 closed by 30 June disputes closed per quarter per FTE 7.0 on a scale of 0 (extremely dissatisfied) to 10 (extremely satisfied) are satisfied that FOS is meeting their needs. For consumers, 7.7 on a scale of 0 (extremely dissatisfied) to 10 (extremely satisfied) are satisfied that FOS is meeting their needs, and for financial services providers % increase in the number of FOS staff who report feeling engaged in the workplace. 5 star rating 2.1% increase in the number of staff who report feeling engaged in the workplace. NABERS 5 star rating 15% 14.8% corporate FTE to total FTE Our strategic measures 11

12 Contact us Website Phone (1800 FOS AUS) 9am to 5pm Monday to Friday Mail GPO Box 3 Melbourne VIC 3001 Financial Ombudsman Service Limited 2016 ABN Published September 2016 About us The Financial Ombudsman Service Australia (FOS) is an external dispute resolution scheme approved by the Australian Securities and Investments Commission (ASIC). Our service is free to consumers. FOS is a not-for-profit organisation, and we are funded by our members who are financial services providers (FSPs) operating in Australia. FOS resolves disputes between consumers (including some small businesses) and FSPs across Australia in these broad product types: credit, general insurance, investments and advice, payment systems, deposit taking, life insurance and traditional trustee services.