FOS Process Redesign Faster, Simpler, Fair

Transcription

1 FOS Process Redesign Faster, Simpler, Fair Background Paper FOS Dispute Process Redesign Proposals May 2014 FOS s Dispute Process Reform We are currently undertaking a significant program of reform to address recommendations made in the 2013 Independent Review of FOS. This includes major initiatives to redesign our dispute resolution processes. By 1 July 2015 FOS will: streamline our process add specialist expertise earlier in our dispute process, and reduce multiple touch points and process stages. Over the next 12 months, we will work closely with our members, consumer groups and other stakeholders through discussions and meetings as we redesign and implement these major changes to our dispute process. The redesign of our process addresses a number of key recommendations made in the Independent Review of FOS. A summary of these recommendations is outlined below. Other recommendations from the Independent Review are being implemented through related initiatives in our program of reform and as part of our Business Plan. We will regularly update our stakeholders about these other initiatives. FOS Dispute Process Redesign Theme Timeliness and efficiency Independent Review Recommendations Recommendation 4 FOS should re-design its Registration and Acceptance processes so that all lodged disputes are referred to the FSP s internal dispute resolution contact to provide the FSP with a final chance to resolve the dispute. Recommendation 3 FOS should introduce a streamlined process for simpler, low value disputes. The process could be less document-based and run by a Board-appointed Adjudicator who would decide the matter after direct contact with the parties. Recommendation 2 Where FOS expedites a dispute to a Determination without a Recommendation first being made, FOS should provide FOS s preliminary view to the parties in writing before the Determination is made. This should be done succinctly, for example, it may be possible to extend an issues letter by simply adding a few paragraphs setting out FOS s preliminary view. FOS Process Redesign May 2014 Page 1 of 17

2 Theme Independent Review Recommendations Where a Recommendation is not accepted by either party and the dispute proceeds to Determination, in the interests of efficiency and timeliness, the Case Manager most familiar with the case should prepare the initial draft Determination in order for a formal decision to be made after review of the issues by the Ombudsman or Panel. Quality and fairness Recommendation 17 FOS should revisit its early resolution processes to achieve much earlier engagement by FOS with the parties about the merits of the dispute, so that this can inform settlement negotiations. Organisational design Recommendation 5 FOS should adopt the following design principles to guide future organisational design and development: Maximise the reach of experience FOS design philosophy should place the most experienced case officers as close to the less experienced staff as practicable, strengthening development and providing some futureproofing. Early involvement of senior staff place senior, experienced input as close to the front end of the process as practicable with input that will give the parties confidence that the merits of the dispute are being engaged with. Minimise hand-offs aim for an environment where once allocated to a case officer who can substantively deal with the matter, the file stays with them and need only be read by the responsible officer and a supervising senior decision-maker/ quality reviewer. Minimise overlays aim for an environment where resources spent organising work are minimised (allocating/ categorising/ reviewing for these purposes) and as much time as possible is spent resolving the dispute. 1. Purpose of this background paper This background paper sets out the broad outline of: our proposals for the redesigned process our timetable for implementing the changes, and the issues we will need to work through with our key stakeholders. This paper provides background information that will be useful to help guide our discussions with members, consumer groups and other stakeholders about the proposed process changes. For further background information, you can read about the program of work and the Board s response to the Independent Review. 1.1 Process redesign objectives We will implement a more streamlined dispute process to resolve disputes more quickly and effectively and reduce dispute stages and touch points, without compromising the quality or FOS Process Redesign May 2014 Page 2 of 17

3 the consistent resolution of disputes. The redesign of our process will ensure a high quality, efficient and faster dispute resolution service for consumers and financial services providers, and will better utilise the skills and experience of our staff. The improved process model will include: a single lodgement process where disputes will be referred to financial services providers for a final opportunity to resolve them using internal dispute resolution before FOS starts its review, and a more streamlined case management and decision process. FOS Process Redesign May 2014 Page 3 of 17

4 2. Summary of key process changes and benefits The redesign of our dispute process provides a number of benefits for consumers and financial services providers. The key process changes and benefits are outlined below. Key process changes We will streamline our current five stage process into three stages We will implement a single dispute lodgement process, which provides FSPs with a final opportunity to resolve a dispute using internal dispute resolution (IDR). We will provide 28 days for an FSP to either resolve a dispute directly with a consumer in IDR or provide FOS with its dispute response, before FOS commences reviewing the dispute. Benefits Simpler, faster, more streamlined process. Increased ease of use and understanding about how we deal with disputes for consumers and FSPs. Faster and more effective resolution of disputes for consumers and FSPs. More disputes resolved through IDR, less disputes coming back to FOS and increased customer satisfaction. Better tracking for Applicants and FSPs of the status and outcomes for all disputes registered with FOS. For disputes that don t resolve in IDR, key information needed to consider a dispute will be obtained earlier from an FSP and a consumer. We will implement a fast track process for low value, simple disputes, which has the early involvement of an Adjudicator. At the beginning of our Case Management stage, a dispute will be assigned to an appropriate FOS case worker who will handle the dispute to closure wherever possible. The case worker may facilitate negotiations, provide early guidance on merit, or arrange a conciliation during an initial 30 day period. Alternatively, where appropriate, the case worker will progress the dispute directly for a Decision and conduct a detailed investigation. Prior to a Decision being issued by an Ombudsman or Panel, a case worker will provide the parties with an initial view on the merits of a dispute. An initial view may be provided through: a Recommendation a combined issues/opinion letter a conciliation or case conference, or discussion with the parties confirmed in writing. Faster and more effective resolution of low value, simple disputes that may require a decision. Earlier involvement of senior, experienced FOS decision makers. Significant reduction of touch points and the number of case workers handling a dispute. Experienced, specialist staff handling disputes earlier in the process. Earlier provision of guidance on the merits of a dispute to consumers and FSPs. Simpler and more streamlined resolution of disputes, with significantly shorter case management timeframes. Consumers and FSPs have the opportunity to consider FOS s preliminary view and provide a further response or information before a Decision is issued. Faster, more streamlined resolution of disputes that require a Decision. FOS Process Redesign May 2014 Page 4 of 17

5 3. Overview of the proposed process redesign 3.1 Current process Currently, there are five stages that a dispute may go through as we work with the parties to resolve it. While we work to consider and resolve the issues, a dispute may be handled by several case workers. When a dispute is lodged at FOS, it will go to either: 1. Registration: if a consumer has not already tried to resolve the dispute with their financial services provider (FSP), or 2. Acceptance: if the dispute has already been through an FSP s internal dispute resolution (IDR) process and has not resolved. It then progresses through up to four further FOS stages. 3.2 Proposed process We intend to streamline our current five-step process into a three-step process: 1. Registration and Referral 2. Case Management 3. Decision FOS Process Redesign May 2014 Page 5 of 17

6 The proposed process redesign for each stage is outlined below. 4. Registration and Referral 4.1 Overview We propose replacing our current two-step dispute lodgement process with a one-step process to be known as the Registration and Referral stage. When a new dispute is registered with FOS, we will refer it to the relevant IDR area of the FSP. FOS will provide the FSP with 28 days 1 to either: 1. resolve the dispute directly with the consumer and confirm the outcome with FOS by the end of the 28-day period, or 2. provide FOS with a response to the dispute and relevant documentation if the dispute is not resolved through IDR. We will then progress the dispute to the Case Management stage to assess the dispute. In some cases, an FSP may try to resolve a dispute directly with a consumer. However, if the consumer contacts FOS at the end of or after the 28-day Registration period to tell us that the dispute is unresolved, we will progress the dispute to the Case Management stage. During the Registration and Referral stage, we will actively track the progress of a dispute. 1 The Registration period for traditional trustee service disputes will be 90 days, given the nature of these disputes, which often involve multiple beneficiaries or affected parties. FOS Process Redesign May 2014 Page 6 of 17

7 4.2 Consumers who require special assistance We anticipate that our improved dispute processes will achieve more timely outcomes for Applicants who require special assistance. In our redesigned process, consumers who require special assistance may be referred directly to the Case Management stage. We will discuss this decision with all involved parties. Where special assistance is required, our Accessibility Guide will provide flexible and appropriate dispute handling options in Registration and Referral, Case Management and Decision. We will assess the dispute based on the consumer s needs and we will discuss this with both parties. 4.3 Providing information We plan to ask for relevant information earlier in the dispute process to help us achieve more timely outcomes in Registration and Referral and Case Management. This includes information that we currently request from an FSP in the first stage of our current Case Management process, including an FSP s initial dispute response to FOS and relevant documentation. As outlined above, when a dispute is first registered, if an FSP has completed IDR or does not intend to further attempt a direct resolution with the Applicant, the FSP will be asked to provide their dispute response and material to FOS. To help Applicants and FSPs provide dispute information earlier, we will develop more dispute resources, improve our dispute lodgement form, and provide more information about our approach and Terms of Reference. 4.4 Registration and Referral closure and progressing to Case Management We will close a dispute at the end of the Registration and Referral period (after 28 days) if we do not receive further contact from an Applicant, or if an FSP provides FOS with its IDR response or resolution confirmation. A dispute will progress to Case Management by the end of the Registration and Referral period if: an FSP does not intend to resolve a dispute in IDR and provides FOS with its dispute response, or an Applicant tells FOS at the end of or after the Registration period that their dispute remains unresolved. 4.5 Disputes involving legal proceedings We will refer a dispute that involves legal proceedings issued by an FSP (LPPI disputes) to the FSP s IDR area for an opportunity to resolve the dispute directly with the Applicant. At the end of the Registration and Referral period, LPPI disputes will automatically progress to Case Management unless appropriate written confirmation of resolution is provided by an FSP during the Registration and Referral period. FOS Process Redesign May 2014 Page 7 of 17

8 4.6 Communicating with parties during Registration and Referral We will enhance our contact and follow up with parties in Registration and Referral to ensure unresolved disputes progress appropriately. Our contact and follow up will include: follow up communication and reminders sent to dispute parties during the Registration and Referral period follow up communication with an Applicant 14 days after a registered dispute has closed, to check with the Applicant whether their dispute has resolved or if it remains unresolved and they wish to progress their matter. We intend to develop a track and trace tool on our website that Applicants can log into to track and check the progress of their registered dispute. We will also enhance our quarterly Applicant survey questions to obtain feedback about the Registration and Referral process and Applicants satisfaction with the accessibility and ease of registering their dispute, and about Applicant satisfaction with the resolution of their dispute at Registration and Referral. FOS Process Redesign May 2014 Page 8 of 17

9 5. Case Management overview 5.1 Overview If a dispute is not resolved at Registration and Referral and progresses to Case Management, we will assess whether the dispute is within the FOS Terms of Reference. If a dispute is assessed as being outside Terms of Reference, we will let the Applicant know in writing, confirm the outcome with the FSP and will take no further action. For disputes that are within Terms of Reference, FOS will complete an early initial workflow assessment, having regard to the issues, claim/s and complexity, in order to determine the appropriate resolution pathway. The process redesign provides for three possible pathways: Fast Track Standard Case Management Complex Case Management. In our current process, a dispute within Terms of Reference may be handled by a number of case workers as it progresses through each stage. In our proposed process, disputes will be handled by one case worker wherever possible. At the beginning of Case Management, after a workflow assessment has occurred, the dispute will be assigned to an appropriate FOS case worker who will handle the dispute to closure. FOS Process Redesign May 2014 Page 9 of 17

10 This will reduce the current number of touch points within our process and is consistent with our intention to bring forward our specialist case handling expertise to the early stages of our process. 5.2 Case Management and Decision timeframes One of our key objectives in improving and redesigning our dispute process is to significantly improve our dispute resolution timeframes. Under our process redesign, if a dispute cannot be resolved through IDR in Registration and Referral and progresses to Case Management, our objective is to achieve the following dispute resolution timeframes: disputes resolved through Fast Track or by agreed resolution: 30 to 60 days disputes that require detailed investigation and the provision of a Recommendation and/or Determination: 90 to 180 days. 5.3 Fast Track, Standard and Complex Case Management features The key features of Fast Track, Standard Case Management and Complex Case Management are outlined below. More information about the Standard and Complex Case Management process is outlined in Section 6. Dispute pathway Details Fast Track An expedited, shortened process for low value, simple disputes which has the early involvement of an Adjudicator. If a fast track dispute cannot be resolved by agreement, either through a short period of negotiation or a case conference/discussion conducted by an Adjudicator, the Adjudicator will issue a Determination to finalise the dispute. We will be piloting the fast track process on a selection of Banking and Finance disputes in June Standard Case Management The standard case management process provides for early resolution by agreement through negotiation, early merits guidance or conciliation conference, during a 30 day period. If a dispute cannot be resolved by agreement, the case worker will complete a detailed investigation and assessment, before a Determination is issued by an Ombudsman. An initial view on the merits of a dispute will be provided by the case worker to the parties prior to a Determination being issued. This will provide the parties with a final opportunity to consider and accept or reject the initial view and provide any further information for consideration prior to the Determination. An initial view may be provided through a Recommendation issued by a case worker or other appropriate methods, outlined below. FOS Process Redesign May 2014 Page 10 of 17

11 Dispute pathway Complex Case Management Details The complex case management process also provides for early resolution by agreement through negotiation, early merits guidance or conciliation conference, during a 30 day period. If a dispute cannot be resolved by agreement, the case worker will complete a detailed investigation and assessment, before a Determination is issued by an Ombudsman or Panel. An initial view on the merits of a dispute will be provided by the case worker to the parties prior to a Determination being issued. An initial view may be provided through a Recommendation issued by a case worker or other appropriate methods, outlined below. Due to the nature of more complex disputes, the investigation and decision making work in Complex Case Management will generally be more involved and complex disputes will be assigned to and handled by our most experienced and senior case workers. 5.4 Criteria for Fast Track, Standard and Complex case management The criteria for which pathway a dispute takes will be based on complexity and factors including the nature and number of products and issues in dispute, and the value of the claim. Some examples of possible dispute types within each category are outlined below. These are intended to be illustrative only. We will continue to refine the criteria for each dispute pathway over the next six months, including through the pilot of the Fast Track process. Banking and Finance General Insurance Investments & Life Insurance Complex Secured maladministration disputes Guarantee disputes Disputes with high value claims Medical indemnity disputes Fraud disputes Disputes with high value claims Investment disputes with high value or multiple claims Life Insurance disputes involving conflicting medical evidence Standard Unsecured maladministration disputes Transactions and charges disputes >$10,000 Fast Track Single issue transactions disputes <$10,000 Denial of claim disputes >$10,000 Policy cancellation disputes Single issue disputes <$10,000 Investment disputes with single issues/claims >$10,000 Life insurance denial of claim disputes Single issue disputes <$10,000 FOS Process Redesign May 2014 Page 11 of 17

12 6. Fast Track process 6.1 Fast track process and pilot The Fast Track process is intended for simple, low value disputes that may require a decision in order to resolve. We will be commencing a pilot of the Fast Track process in June 2014 on some Banking and Finance single-issue disputes with claims less than $10,000. The Fast Track process will have the early involvement of an Adjudicator to conduct a case conference with the parties and, if the dispute remains unresolved, to issue a short Determination. At the conclusion of the pilot later this year we will review the results, make any necessary refinements to the process and criteria, and look at expanding the process to other dispute types. FOS Process Redesign May 2014 Page 12 of 17

13 7. Case Management and Decision 7.1 Standard and Complex Case Management Under our proposed process the same FOS case worker will deal with the dispute through to closure wherever possible, including disputes that require a Recommendation and/or Determination. This will reduce the number of case workers handling a dispute, reduce the number of touch points in our process and increase the timeliness of our case management. There will always be some exceptions where reassigning a case to another case worker may be appropriate. Our intention, however, is for this to only occur in the minority of disputes. From the beginning of Case Management a case worker will have appropriate flexibility to initially review an unresolved dispute and apply an appropriate resolution method based on the nature of the dispute. A case worker may facilitate early negotiations, provide early guidance on the merits of the dispute, arrange a conciliation conference or progress the dispute directly to Decision. FOS Process Redesign May 2014 Page 13 of 17

14 7.2 Shorter Case Management timeframes and targeted information requests Our proposed process will ensure earlier guidance and assessments are provided to dispute parties. Within an initial 30 day period after a dispute has been assigned and reviewed at the Case Management stage, the case worker may: conduct negotiations provide the dispute parties with early merits guidance arrange a conciliation, or decide that the dispute is not likely to resolve by agreement (and progress it directly to Decision). The proposed process includes more targeted requests for relevant information and material required to consider a dispute in Case Management. Due to the earlier request for dispute information and material that will occur in Registration and Referral, the current 28 day timeframe for an FSP to submit their initial dispute response to FOS at the beginning of Case Management has been removed in the redesigned Case Management process. After a dispute has been initially reviewed in Case Management, further information will only be requested from either party if it has not already been provided and we consider it is essential for the consideration and assessment of the dispute. 7.3 Initial view and decision Currently, if a dispute cannot be resolved by agreement and requires a written decision, we may: issue a Recommendation which outlines the case worker s initial view of the merits of the dispute, prior to a Determination being made by an Ombudsman or Panel, or where appropriate, expedite it directly to Determination without a Recommendation being issued. In response to several of the recommendations made in the Independent Review, the proposed process will ensure that FOS provides an initial view of the merits of a dispute to the parties to consider and respond to prior to any Determination being issued. The proposed process provides greater flexibility in how an initial view of the dispute s merits will be provided to the parties, including via: a Recommendation a combined issues/opinion letter a case conference conducted by an Ombudsman, or discussion with the parties confirmed in writing. FOS Process Redesign May 2014 Page 14 of 17

15 8. What s next? 8.1 Stakeholder feedback This background paper sets a general overview of the proposed changes to our dispute process. We will be discussing the proposals in a series of meetings with ASIC, industry bodies, consumer organisations and other stakeholders. Our aim is to develop and refine the proposals for implementation in Some of the issues we will be exploring with stakeholders include: 1. What we can do to further enhance our proposed dispute lodgement and 28 day Registration and Referral stage. 2. Other safeguards we should include to ensure that disputes resolve effectively in the Registration and Referral stage, or progress appropriately to Case Management for assessment. 3. How we can more effectively obtain and then exchange and share dispute information with consumers and FSPs, including through our online secure services portal. 4. The type of guidance, for example online resources, that we can provide Applicants and FSPs to assist them getting the right information to us as soon as possible We also welcome any direct feedback to Michael Ridgway at dpr@fos.org.au and would appreciate any comments by Friday 20 June Alternatively, stakeholders can provide views through one of the industry or consumer bodies or attend relevant stakeholder meetings to discuss these issues. FOS Process Redesign May 2014 Page 15 of 17

16 8.2 Next steps May - June 2014 July 2014 September - June 2015 November - March July 2015 Process redesign background paper and stakeholder discussions Feedback response circulated Further process redesign information circulated Consultation with FSPs on proposed new dispute fees Process changes fully commence Over the next 12 months, as we refine and further develop our process improvements and other dispute handling changes, we will provide more information and seek feedback about the changes and any proposed enhancements, including: how we will communicate with parties in the new process technology enhancements, including our secure services portal and our online dispute form, and additional dispute resources we will make available to assist Applicants and FSPs changes to our dispute fees. As part of our response to the recommendations of the Independent Review, over the coming year we will also implement other improvements and changes to how we deal with disputes. We will let you know about these other changes through our regular Circulars, industry and consumer forums, and other means. For more information on the Independent Review and our response, please go to FOS Process Redesign May 2014 Page 16 of 17

17 Appendix 1 FOS Dispute Process Reform (DPR) program of work The DPR program of work will address issues of FOS process redesign, the elimination of backlogs, and the addition of specialist skills to the early stages of the dispute process. It will incorporate our existing backlog strategy, including Project 500, and includes several new projects, which are: Dispute Process Redesign This project will redesign our dispute process and aims to reduce the current number of steps and touch points. The process redesign will include implementing a one-step lodgement process which will provide FSPs with a final opportunity to resolve a dispute through IDR before FOS starts considering a dispute. This project will also look at how we can add more specialist expertise in the early stages. We intend for any process enhancements arising from this project to be fully implemented by 30 June Fast Track process The Fast Track Process will help us expedite and more quickly resolve low value and simpler disputes that do not require lengthy investigation. Financial Difficulty Enhancement project The Financial Difficulty Enhancement project will look at streamlining our Financial Difficulty processes and approach, in order to achieve more timely outcomes and earlier assessments in Financial Difficulty disputes. FOS Process Redesign May 2014 Page 17 of 17