Consumers and Contracts

Complaints and Alternative Dispute Resolution Schemes

An alternative to the traditional court/tribunal system is to utilise private dispute resolution schemes. The particular industry you are dealing with might operate such a scheme, for example:

• ACAT Energy and Water ( http://www.acat.act.gov.au) (and equivalent bodies interstate such as the Energy and Water Industry Ombudsman of NSW) investigates and facilitates the resolution of complaints and disputes by consumers against electricity, gas and water providers;
• the Financial Ombudsman Service (FOS) investigates and facilitates the resolution of complaints and disputes by consumers against financial service providers, including banks and their affiliates, providers of life insurance, superannuation, funds management, financial advice, stockbroking, investment advice and the sale of financial or investment products. FOS operates in five Divisions: Banking & Finance; General Insurance; Insurance Broking; Mutuals; and Investments, Life Insurance & Superannuation, reflecting the business areas of three schemes which merged to form FOS. A complete list of organisations covered by the Financial Ombudsman Scheme is at www.fos.org.au. Jurisdictional limits apply within FOS -- banking claims are limited to $280,000; life insurance claims are limited to $280,000; income protection insurance claims are limited to $6,000 per month and claims involving funds management, stockbroking, investment and financial advice are limited to $150,000;
• the Telecommunications Industry Ombudsman (TIO) investigates and facilitates the resolution of complaints and disputes by consumers against telecommunications service providers, including landline, mobile phone and internet services. The TIO will not investigate complaints that are more than 12 months old (except in special circumstances) or where legal proceedings have commenced;
• the Superannuation Complaints Tribunal (SCT) investigates and facilitates the resolution of complaints and disputes by consumers in relation to superannuation funds, annuities and deferred annuities and Retirement Saving Accounts (see: Chapter 68 Superannuation). The SCT will initially assist consumers to reach an agreed settlement through conciliation. If the complaint cannot be conciliated the SCT will consider submissions and make a determination. A determination of the SCT is binding on both parties. It is, however, possible to appeal a determination to the Federal Court; and

All of these schemes are independent and free-of-charge, and are less formal and generally speedier than tribunals and courts. When resolving a dispute the schemes are required to take account of law, good industry practice and what is fair and reasonable in all the circumstances.

As a result of the introduction of the Financial Services Reform Act 2001 (Cth), which amended the Corporations Act 2001 (Cth), all financial services providers must belong to an external dispute resolution scheme that has been approved by the Australian Securities and Investments Commission (ASIC) (ss 912A(2)(b) and 1017G(2)(b) of the Corporations Act 2001 (Cth)). The FOS (which incorporated the previous BFSO, IOS and IBD on 1 July 2008) and FICS have been approved by ASIC. For guidance on how ASIC determines whether to approve an external dispute resolution scheme, see its Policy Statement 139 on the ASIC website at www.asic.gov.au.

For details on how to access these schemes, and other industry specific schemes, see Contacts, Links, Resources and References.