Resolving a financial complaint

Avoid the cost of going to court by resolving a matter yourself or using the free Financial Ombudsman Service.
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02.How the FOS complaints service works

Complainants should first contact the company to try and settle the matter within 45 days (or 21 days in certain cases). If resolution isn’t reached within this timeline, FOS then assesses if the dispute is within its jurisdiction and if they can take it on.

The Ombudsman can investigate complaints worth up to $500,000 and award a maximum of $280,000 for all disputes except:

Complaints must be lodged with the Ombudsman within six years of you becoming aware (or should have been reasonably aware) of suffering a loss. If you’ve already received a response from the financial company’s internal dispute resolution (IDR) scheme, the limit for an Ombudsman complaint is two years.


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How to lodge a complaint

STEP ONE The first step is to lodge an official complaint with the company's internal dispute resolution (IDR) scheme. You have two options — contact the company directly, or contact the Ombudsman. CHOICE recommends registering your complaint with the Ombudsman first, which will then refer the complaint to the company on your behalf. Consumer lawyers often cite difficulties people have in finding the contact details for companies’ internal dispute resolution schemes; the Ombudsman can now provide all such details of its members and says they’re available on the FOS website. The company has 45 days to resolve the complaint without Ombudsman involvement.

STEP TWO If the company doesn’t resolve your complaint within 45 days, you should lodge a dispute form with the Ombudsman and supply all supporting documentation and information. The Ombudsman’s office will assess whether the dispute is within its terms of reference; if it is, the Ombudsman will refer the dispute to the company, which has 21 days to resolve the dispute with the consumer, or to provide a response to the Ombudsman.

STEP THREE If the issue is still unresolved, the Ombudsman will review and may use negotiation and conciliation to find a resolution, or give an initial view that may resolve the dispute. Ideally, a resolution will be reached without requiring a formal decision, provided both parties are satisfied. Otherwise, the Ombudsman will investigate the dispute in more detail and collect information and documentation from both parties.

STEP FOUR The Ombudsman has the power to make a Recommendation, which is a written decision. If both parties choose to accept the Recommendation within 30 days, the dispute is resolved. Otherwise, either party can ask the Ombudsman to make a determination, which is a final written decision that’s binding on the company if the consumer accepts it within 30 days.

STEP FIVE You don’t have to accept the determination – but if you don’t, the Ombudsman cannot help you any further. If a dispute is decided by the Ombudsman, the company must abandon any legal proceedings inconsistent with that decision.

The outcome

The Ombudsman’s recommendations are binding on the company if the consumer accepts the outcome, but if you don’t like the outcome it’s not binding on you — you can still take a separate legal action. While your dispute is being dealt with, the company you’re complaining about cannot begin (or must freeze) legal proceedings, pursue you for debt recovery or take action to recover debts that are the subject of the dispute. You also cannot be sued for defamation no matter what you say about the company to the Ombudsman, and any information obtained cannot be used in subsequent court proceedings, unless required by an appropriate court process.

Misleading information by the bank

Fiona Hitchcock’s car was written off following an accident six years ago. It was insured, but there was a loan amount outstanding. When she asked about the process for clearing the remaining loan after her insurance payment was received, Fiona was told by her bank that she could view the insurance payout as an advance loan repayment and simply make further repayments as she wished.

“Six months later, I received a nasty letter saying the bank had the right to take my money out of my account for the outstanding debt,” Fiona says. “I withdrew all the money from that account, which was used to cover my rent. And on the advice of a community financial adviser, I complained to the Financial Ombudsman Service on the basis that misleading information was provided by the bank.

“Soon after that, the bank ‘remembered’ that I had income protection insurance (Fiona had stopped working full-time some months before the accident due to ill health). They paid out my debts and reimbursed me with about $10,000. The bank’s customer service representative couldn’t believe the insurance department had made the payment – apparently this rarely happens. "I had almost ended up broke homeless and in court. What gets me is I never had an overdue debt, and when I did run into trouble I was treated like a vagrant.”


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