The past 12 months…
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The past 12 months…. We have seen a large increase in disputes involving financial difficulty in the last year Wide range of disputes: Low, middle and high income earners Consumer loans and business loans Secured and unsecured loans. Significant future events. - PowerPoint PPT Presentation
Transcript of The past 12 months…
The past 12 months…
We have seen a large increase in disputes involving financial difficulty in the last year
Wide range of disputes:
Low, middle and high income earners
Consumer loans and business loans
Secured and unsecured loans
Significant future events
National Consumer Credit Protection Bill
Financial OmbudsmanService – new:
Terms of Reference(with ASIC for approval)
Operational Guidelines
Policies and Procedures
National Consumer Credit Protection Bill
If NCCP Bill is passed in its current form, StateCourts and Tribunals (eg VCAT and CTTT) willno longer hear hardship applications
If the consumer makes a hardship application toa credit provider and it is not accepted, then underthe NCCP Bill consumers will have the option of:
(a) commencing proceedings in the Federal Magistrate Court
(b) bringing their dispute to an EDR scheme
$500,000 hardship threshold
Notification of EDR scheme in default notices from1 July 2010
Proposed Terms of Reference
Clause 5.1(c) - we can consider a variation of a consumer credit contract as an exception to the commercial decision exclusion
Clause 9.1(f) - we will have power to vary the terms of a credit contract in cases of financial hardship
Clause 13.1(a) - we will consider a dispute lodged with us, even though the Financial Services Provider has previously commenced legal proceedings
Internal Dispute Resolution first
Clause 6.3 introduces a formal requirement that an Applicant must go to a Financial Services Provider first before we can consider the dispute
A FSP will generally have a 45 day period in which to provide an IDR response after the initial date of contact
The 45 day period can be shortened if we consider the matter is urgent
ASIC Consultation Paper 112 – less than 45 day timeframe – proposes 21
New process for hardship variations
Starts toward the end of 2009 or when credit reforms in operation
May expedite consideration of disputes about a refusal to grant a variation of a NCCP loan
Telephone conciliation – will be set following receipt of an IDR response or after number of required days has elapsed since an IDR response has been requested (unless there are reasons why it can not be held at an early stage)
Ombudsman Case Conferences where appropriate
What we aim to achieve
Accessible dispute resolution process
Resolution of disputes in a cooperative, efficient, timely and fair manner
Minimum formality and technicality
Avoidance of debt escalation and erosion of security
New process for hardship variations
Non-NCCP hardship disputes may also be conciliated
Small business/complex disputes may require longer timeframes before conciliation can occur to enable appropriate exchange of information between the parties
Telephone conciliation conference
Forum to attempt to resolve dispute at an earlier stage
The telephone conciliation will be facilitated by a conciliator at Financial Ombudsman Service
What if the dispute is not resolved by telephone conciliation?
In the future…
We will be able to make binding decisions to vary a credit contract when the credit reforms come into operation
We will be able to consider disputes after legal proceedings have been issued (before judgement has been entered)
Telephone conciliation process will be used extensively to resolve disputes in a timely manner
Financial Difficulty Team
Joanna HarrisFinancial Difficulty Manager
Georgina Frost & Anna MandokiCase Managers
Meredith WalkerTeam Leader
Sally ThompsonSenior Case Officer
How to contact us
Diana EnnisManager – Disputes, Banking & Finance
GPO Box 3, Melbourne VIC 3001
1300 78 08 08
www.fos.org.au Customers in Financial Difficulty factsheet
