External dispute resolution - what to do if you are dissatisfied with a decision
How does a scheme decide if it can deal with your complaint?
External dispute resolution (EDR) schemes have rules which set out the complaints they can deal with. When you first make a complaint to an EDR scheme, the scheme considers whether the complaint is within its rules or terms of reference.
In some cases, the scheme will not be able to deal with your complaint because of the rules under which it operates.
For example, if the value of your claim exceeds the amount that the scheme is allowed to deal with under its rules, or a dispute relates to a business (commercial) decision of a financial services or credit provider – such as the decision to charge a certain interest rate – or if the complaint is too old, the scheme may be unable to hear the dispute.
Each scheme publishes its rules and information about how it decides if it can deal with your complaint on its websites. For more information, see the Financial Ombudsman Service (FOS) or the Credit and Investments Ombudsman (CIO).
How will a scheme deal with your complaint?
EDR schemes act independently by not taking sides when dealing with complaints. They will work with you to help deal with your complaint. If a compromise is not reached, they will ultimately make a decision.
When you lodge your complaint with a scheme, you will need to explain your complaint and give the scheme any supporting documents or information. Your financial services or credit provider will also give their side of the story and give the scheme any supporting documents or information.
Schemes can use different approaches to deal with your complaint. This may include negotiation between the parties, conciliation or mediation which may lead the parties to find a mutually agreed resolution. In other cases, after considering the facts and information, the scheme can make a decision about the issues in dispute and how to resolve it.
This decision may be in favour of you (the consumer) or the financial services or credit provider, or it could be a decision that is acceptable to both parties. This decision may be that the financial services or credit provider should pay compensation, or it could be as simple as deciding that an apology should be made for bad service. Schemes must give the reasons for their decisions in writing.
Although the financial services or credit provider has to accept the decision, you do not have to accept it. If you do not accept the decision, you retain your legal rights to take your complaint to court.
What you should do
Consider the reasons for the decision and contact the scheme to discuss it
FOS offers an internal review if you disagree with its view that it cannot deal with your complaint. However, you must ask for a review within 30 days of receiving FOS's response.
Schemes must make their decisions fairly having regard to the law and good industry practice.
Final decisions will only be reviewed in limited circumstances (for example, if there has been a calculation error).
Ask the scheme to explain the decision. If you think an error has been made, let the scheme know. An example of this may be where there seems to be a calculation error or where a vital piece of information may have been overlooked.
Consider your legal options
If a scheme makes a decision in favour of your financial services or credit provider and you are still unhappy, you are not bound by the decision. You retain your rights to take your complaint to court.
Please note: It may not always be worth your while to start court action over a small dispute. On the other hand, court action may be the only avenue available for you to be compensated for your loss, particularly if you have suffered a large loss.
A lawyer can tell you if you have a good case to take to court.
If you are unsure of how to access legal advice, contact the Law Society in your state or territory.
ASIC and EDR scheme decisions
ASIC's role is to provide oversight to EDR schemes to ensure they are working (and continue to work) effectively in dealing with consumer complaints. This means we approve the rules within which the schemes operate and ensure that they meet their obligations as an approved complaints scheme.
EDR schemes are independent and are responsible for their own internal processes and management of disputes.
ASIC does not provide dispute resolution services like EDR schemes do.
This means that we cannot:
- order that money be paid to make good on investment or other losses
- cancel a loan or work out a payment plan for debts with people that you owe money to
- tell EDR schemes what to do and what decisions to make (they are independent)
- make a binding decision about who is right or wrong in a dispute
- review decisions by EDR schemes (only a court can reconsider a matter that has been before an EDR scheme), or
- give legal advice or generally act on behalf of individual consumers, as we are a regulator.
For these reasons, our role in helping you resolve your issue is to guide you to the appropriate place to deal with it.
In our oversight role, we can take feedback about your experience with an EDR scheme. However, this does not include intervening in the decision-making process of the scheme.
We do take note of and consider the issues raised by the public about financial services or credit providers or representatives. This is valuable information for us in performing our oversight role.
Where can I get more information?
- More information about ASIC’s role and the laws we manage.
- For more information about internal dispute resolution and EDR schemes, see Information Sheet 174 Disputes with financial services or credit provider (INFO 174).
- For more information about EDR schemes, including sample complaint letters for lodging a dispute with a financial services or credit provider, see ASIC's MoneySmart website.
- For information about our oversight of EDR schemes, see Regulatory Guide 139 Approval of external dispute resolution schemes (RG 139).
This is Information Sheet 176 (INFO 176), reissued in February 2015. Information sheets provide concise guidance on a specific process or compliance issue or an overview of detailed guidance.