Credit ombudsman service
Encyclopedia
Australia's Credit Ombudsman Service, or COSL, is an industry ombudsman
established in 2003 as a result of the Mortgage & Finance Association of Australia ('MFAA') self regulation and the then increasing interest in non-bank lending. The Credit Ombudsman
Service is the largest External Dispute Resolution (EDR) scheme in Australia by its number of members, totaling over 10,000 (2010). It aims to help settle disputes between consumers and Australian-based businesses providing financial and credit
services which include:
) scheme and later adopted COSL as its current name in 2004. COSL is an approved EDR scheme under scheme approved by ASIC’s Regulatory Guide RG 139 and its services are free for consumers. Funding is sourced from a combination of its membership fees and complaint fees paid by its participating Members. COSL can award compensation up to a maximum of $250,000 and other remedies, such as an apology, can be asked for.
s or disputes about its participating Members' concerning their products and services, such as mortgages, credit products, financial planning, managed investment, insurance and deposit taking (savings).
COSL resolves disputes in a non-adjudicative means through conciliation
, although the actual Ombudsman can make a decision which is binding on the member (a Determination
). Like all ASIC RG 139 approved schemes, Determinations made by the Ombudsman bind Members but not complainants.
COSL’s conciliation process is both inquisitorial and consensus-based and focuses on producing a mutually satisfactory outcome. Both Members and consumers are afforded an equal opportunity to put forward their cases. This is intended to ensure procedural fairness and promote effective dispute resolution.
The full dispute resolution process can be found on the COSL website: Complaint Process
To find out if the organisation or individual is a Member of the COSL, COSL have provided an extensive list available to search via the COSL website.
Every COSL Member has a dedicated Complaints Contact Person, however a complainant need not speak to this person to express their dissatisfaction. In small organisations this may be the person with whom a consumer has been dealing with entirely. Some large organisations and franchises have dedicated (full-time) complaint handlers to which a complainant may be referred to depending on the matter at hand. Every Member must also have in place procedures called Internal Dispute Resolution Procedures or 'IDR Procedures'. The IDR Procedures require that a Member must:
If, after trying to resolve a complaint through the organisations internal Procedures, a consumer does not believe the
There are some types of disputes that COSL are unable to consider which are specified in the Credit Ombudsman Rules.
Some include, but are not limited to:
If a complainant is unsure whether a complaint is covered by the Credit Ombudsman Service, they can contact COSL who will let them know whether or not a complaint is one which can be dealt with. If a complaint is not covered, COSL will write to the consumer giving the reasons why.
If after contacting the Member a consumer is not satisfied, or the dispute remains unresolved, a consumer can make a complaint to the Credit Ombudsman Service.
Once COSL have received a letter of dispute or a complaint form, COSL will contact a consumer to confirm whether COSL can consider the dispute. If COSL cannot assist, COSL may refer a consumer to another organisation that can.
If COSL can consider the dispute, COSL will send a copy of the complaint and accompanying documents to the Member concerned.
The Member must give a response to the complaint to COSL within 21 days of receiving the complaint. COSL will send a copy of the Member's response as soon as is practical.
Ombudsman
An ombudsman is a person who acts as a trusted intermediary between an organization and some internal or external constituency while representing not only but mostly the broad scope of constituent interests...
established in 2003 as a result of the Mortgage & Finance Association of Australia ('MFAA') self regulation and the then increasing interest in non-bank lending. The Credit Ombudsman
Ombudsman
An ombudsman is a person who acts as a trusted intermediary between an organization and some internal or external constituency while representing not only but mostly the broad scope of constituent interests...
Service is the largest External Dispute Resolution (EDR) scheme in Australia by its number of members, totaling over 10,000 (2010). It aims to help settle disputes between consumers and Australian-based businesses providing financial and credit
Credit (finance)
Credit is the trust which allows one party to provide resources to another party where that second party does not reimburse the first party immediately , but instead arranges either to repay or return those resources at a later date. The resources provided may be financial Credit is the trust...
services which include:
- CreditCreditCredit may refer to:* Debits and credits, a type of book keeping entry* Credit , acknowledging the ideas or other work of writers and contributors* Course credit, a system of measuring academic coursework...
providers - CreditCreditCredit may refer to:* Debits and credits, a type of book keeping entry* Credit , acknowledging the ideas or other work of writers and contributors* Course credit, a system of measuring academic coursework...
representatives - Fund managers
- Credit unions
- Building Societies
- LeasingLeasingLeasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments....
companies - MicroMicroMicro is a prefix in the metric system denoting a factor of 10-6 . Confirmed in 1960, the prefix comes from the Greek , meaning "small".The symbol for the prefix is the Greek letter μ...
Lenders - mortgage brokers
- non-bank lendersNon-banking financial companyNon-bank financial companies are financial institutions that provide banking services without meeting the legal definition of a bank, i.e. one that does not hold a banking license. These institutions are not allowed to take deposits from the public. Nonetheless, all operations of these...
- mortgageMortgage loanA mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan...
managers - mortgage originatorsLoan originationLoan origination is the process by which a borrower applies for a new loan, and a lender processes that application. Origination generally includes all the steps from taking a loan application through disbursal of funds . Loan servicing generally covers everything after disbursing the funds until...
- aggregators
- wholesale fundersWholesale fundingWholesale funding is a method that banks use in addition to core demand deposits to finance operations and manage risk. Wholesale funding sources include, but are not limited to, Federal funds, public funds , U.S. Federal Home Loan Bank advances, the U.S...
- securitisation trusteesTrusteeTrustee is a legal term which, in its broadest sense, can refer to any person who holds property, authority, or a position of trust or responsibility for the benefit of another...
- housing co-operatives
- mortgage insurersMortgage insuranceMortgage insurance is an insurance policy which compensates lenders or investors for losses due to the default of a mortgage loan. Mortgage insurance can be either public or private depending upon the insurer...
- finance brokersBrokerA broker is a party that arranges transactions between a buyer and a seller, and gets a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal...
History
The Credit Ombudsman Service was established in 2003 as the Mortgage Industry Ombudsman Service Limited (‘MIOS’) as an EDR (External Dispute Resolution, known in other regions as ADRAlternative dispute resolution
Alternative Dispute Resolution includes dispute resolution processes and techniques that act as a means for disagreeing parties to come to an agreement short of litigation. ADR basically is an alternative to a formal court hearing or litigation...
) scheme and later adopted COSL as its current name in 2004. COSL is an approved EDR scheme under scheme approved by ASIC’s Regulatory Guide RG 139 and its services are free for consumers. Funding is sourced from a combination of its membership fees and complaint fees paid by its participating Members. COSL can award compensation up to a maximum of $250,000 and other remedies, such as an apology, can be asked for.
Complaints Process
COSL can only consider complaintComplaint
In legal terminology, a complaint is a formal legal document that sets out the facts and legal reasons that the filing party or parties In legal terminology, a complaint is a formal legal document that sets out the facts and legal reasons (see: cause of action) that the filing party or parties In...
s or disputes about its participating Members' concerning their products and services, such as mortgages, credit products, financial planning, managed investment, insurance and deposit taking (savings).
COSL resolves disputes in a non-adjudicative means through conciliation
Conciliation
Conciliation is an alternative dispute resolution process whereby the parties to a dispute agree to utilize the services of a conciliator, who then meets with the parties separately in an attempt to resolve their differences...
, although the actual Ombudsman can make a decision which is binding on the member (a Determination
Determination
Determination may refer to:* Determination , 2001* Determination , 1992* Cell fate determination* Co-determination* Coefficient of determination* Expert determination* Hidden surface determination...
). Like all ASIC RG 139 approved schemes, Determinations made by the Ombudsman bind Members but not complainants.
COSL’s conciliation process is both inquisitorial and consensus-based and focuses on producing a mutually satisfactory outcome. Both Members and consumers are afforded an equal opportunity to put forward their cases. This is intended to ensure procedural fairness and promote effective dispute resolution.
The full dispute resolution process can be found on the COSL website: Complaint Process
Making a complaint
The Credit Ombudsman Service can help with a complaints for consumers if they have dealt with a participating Member of COSL as:- a borrower or prospective borrower
- a loan guarantor or prospective guarantor
- or have in any way sought the services of a Member in the ordinary course of their business in the credit marketplace.
To find out if the organisation or individual is a Member of the COSL, COSL have provided an extensive list available to search via the COSL website.
First steps to take
Before taking a complaint to COSL, complainant's must try to resolve their complaint with the Member concerned by expressing their dissatisfaction either in writing or via telephone.Every COSL Member has a dedicated Complaints Contact Person, however a complainant need not speak to this person to express their dissatisfaction. In small organisations this may be the person with whom a consumer has been dealing with entirely. Some large organisations and franchises have dedicated (full-time) complaint handlers to which a complainant may be referred to depending on the matter at hand. Every Member must also have in place procedures called Internal Dispute Resolution Procedures or 'IDR Procedures'. The IDR Procedures require that a Member must:
- give you the name and contact details of their Complaints Contact Person before undertaking any services for you.
- give you a copy of their Internal Dispute Resolution (IDR) Procedures if you ask for them.
- give you a substantive response within 45 days of lodging your complaint with them (if there is a delay they must inform you of the reason).
If, after trying to resolve a complaint through the organisations internal Procedures, a consumer does not believe the
Complaints Covered
The types of complaints covered by the COSL are set out in the Credit Ombudsman Rules. In general, a consumer can make a complaint to COSL if they believe that the Member they have dealt with has:- breached relevant laws.
- breached the MFAA Code of Practice or other recognised Codes of Practice.
- not met standards of good practice in the Credit Industry.
- acted unfairly.
There are some types of disputes that COSL are unable to consider which are specified in the Credit Ombudsman Rules.
Some include, but are not limited to:
- if the complaint is about someone who is not a Member of the Credit Ombudsman Service at the time the complaint is made.
- if the complainant is not the person to whom the credit services in question were directly provided by the Member.
- if the complainant is claiming greater than $250,000.
- if the complaint is being, or has previously been, dealt with by a court, tribunal, arbitrator or other dispute resolution scheme.
- if the complaint is more appropriately dealt with by the courts or other procedure.
If a complainant is unsure whether a complaint is covered by the Credit Ombudsman Service, they can contact COSL who will let them know whether or not a complaint is one which can be dealt with. If a complaint is not covered, COSL will write to the consumer giving the reasons why.
Cost
There is no fee for individuals or small businesses when making a complaint to the Credit Ombudsman Service. Some complainants, in rare occasions, may have to pay a fee of which the COSL will advise prior to dealing with the complaint.If after contacting the Member a consumer is not satisfied, or the dispute remains unresolved, a consumer can make a complaint to the Credit Ombudsman Service.
Once COSL have received a letter of dispute or a complaint form, COSL will contact a consumer to confirm whether COSL can consider the dispute. If COSL cannot assist, COSL may refer a consumer to another organisation that can.
If COSL can consider the dispute, COSL will send a copy of the complaint and accompanying documents to the Member concerned.
The Member must give a response to the complaint to COSL within 21 days of receiving the complaint. COSL will send a copy of the Member's response as soon as is practical.