Code of Practice & Disputes Resolution Service

Procedure for Escalating Complaints to the FBAA

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Who can complain?

Someone who:

1. Is a Client or Credit Provider; and
2. Has been dealt within a manner which is believed by them to be in breach of the FBAA Code of Practice and Dispute Resolution Service Rules; or
3. Has provided security for a financial service (e.g. guarantor) or in cases where there are claims by the customers relating to a breach of relevant laws, confidentiality or privacy or acted unfairly towards them

The proviso applicable to all of the above being that the matter must have been dealt with first by the Member/business, but has been unable to reach resolution.

Who can't complain?

1. Where the matter is deemed frivolous, vexatious, or of improper purpose. Where it relates to an area better served by another jurisdiction e.g. privacy commissioner or the courts.
2. Where it relates to a legally claimable broker fee/commission.
3. Where it relates to a lender’s (or mortgage insurer’s) decision, terms or conditions.
4. Where the substance of the dispute is or has already been, the subject of consideration by the FBAA’s internal DRS, statutory body, other complaint or disputes resolution body including ombudsman schemes, or adjudication by the court, tribunal or other legal process.

STEP 1 – PROCESS

The matter will, in the first instance, be referred to the respective state FBAA President, who will endeavor to attain sufficient information to decide what path it would be prudent that the matter should take, he/she will consider whether it is a matter that can be considered by the FBAA DRS, and may be able to mediate the matter for resolution themselves. If unable to resolve, he/she then has the option to refer the matter to an MO under the FBAA DRS. The MO will be a person appointed by the FBAA whom they believe has the ability to hear/mediate the dispute, and a person who is not linked in any way to the FBAA. The MO will be guided by the procedures as per Standards Australia AS4608-2004 and AS4608-1995.

STEP 2 – RESOLVING

The Dispute – Escalation to Mediation Officer

Conciliation of alleged breach of the Code by MO

The MO will endeavour to resolve alleged breaches of the Code by conciliation. In conciliating the dispute, the MO is to give fair and just advice and assistance to the parties having regard to what is fair and reasonable in all the circumstances, the principles of any broker specific law and practice and the principles and objectives of the Code.

Discretion of MO to refuse to consider or continue considering a dispute which is inappropriate for the procedure

The MO will have discretion to refuse to consider or continue considering a dispute which the MO believes in all the circumstances to be inappropriate for this procedure.

For example where:

1. The MO does not believe that the conduct complained of is covered by the FBAA Code of Practice and Dispute Resolution Service Rules.
2. The alleged breach is also, or could be, the subject of a dispute already covered by the DRS or an ADRS.
3. The substance of the dispute is, or has already been, the subject of consideration by the MO, Referee, a statutory body, or other complaint or dispute resolution process, or adjudication by a court, tribunal or other legal process.
4. Insufficient information has been provided by the complainant to allow the MO to properly consider the dispute.
5. The complaint is deemed by the MO to be frivolous or vexatious or of improper purpose.
6. The Finance Broker's right to indemnity under a professional indemnity insurance policy may be seriously prejudiced if the matter was to proceed in the absence of consent by the relevant professional indemnity insurer and that insurer has refused or failed to provide an appropriate consent.

Where the MO exercises the discretion referred to above, the MO is required to provide written reasons for his/her decision to the complainant and where appropriate, any steps which the complainant must take before the MO will consider or continue to consider the alleged breach of the Code. Alternatively the complainant is to be advised that they may progress the matter to an ADRS or other means of having their grievances heard.

Right of appeal to Referee against decision by MO

If the complainant informs the MO that they do not agree with the MO's decision, the matter will be escalated to an independent referee for further adjudication.

The MO will be required to provide to the referee:

1. Written reasons for the decision.
2. Such information and documents which the MO considers will be relevant in assisting the Referee to decide whether the decision was appropriate or not.
3. Such other information and documents which the Referee shall require. If the Referee decides that the decision was not appropriate, the MO must continue to consider the alleged breach of the Code subject to the complainant complying with any steps which the Referee may require the complainant to take.

Request for information by MO

For the purpose of determining whether to consider, or continue considering any dispute, the MO may request from the Finance Broker, the complainant, or any third party, including another Finance Broker or a Credit Provider, documents or other information relevant to dispute. Any Finance Broker and complainant are encouraged to provide all such documents or information promptly. Provision of any confidential documents or information of the Finance Broker's Client relevant to the dispute is subject to the Finance Broker receiving the consent of its Client to providing such documents or information.

Any documents identified as confidential will retain to the fullest extent permitted by law, their confidential status and will not be provided to any person without prior written consent or except as required by law. A document identified as subject to a claim for privilege will not be copied or reproduced in whole or in part by the MO.

The MO will notify the Finance Broker and the complainant as soon as is reasonably possible if any document supplied by them to the MO is subpoenaed by any person or entity, or is otherwise required to be produced to any person or entity.

Time frames for conciliation

Conciliation of a dispute must be completed by the MO within 20 working days of the date on which the MO was notified in writing of the dispute, or such other time as the MO decides is reasonable in the circumstances.

Failure of MO to resolve dispute - automatic referral to Referee by MO

If a dispute is not resolved to the satisfaction of the complainant, the MO or the Finance Broker, the MO will refer the dispute to the Referee within 20 working days of the day on which the MO requested the broker to comment on the complaint in writing. The MO does not have the power to make any decisions which bind the Finance Broker or the complainant. In referring an alleged breach of the Code to the Referee the MO will provide the Referee with:

1. Such information and documents which the MO considers will assist the Referee in making a determination.
2. Such other information and documents which the Referee shall require.

STEP 3 – RESOLVING THE DISPUTE

Escalation to the Referee

Determination of a dispute by the Referee

The Referee will determine any dispute referred to it by the MO in accordance with the above section. In determining the dispute, the Referee will have regard to what is fair and reasonable in all circumstances as well as the principles of finance broking law and practice and the principles and objectives of the Code. Both the Finance Broker and complainant will have a right to present their case to the Referee. The form in which it is to be presented is at the discretion of the Referee. The Finance Broker is to be informed by the Referee of the case made against them by the complainant.

The Referee will have the discretion to refuse to consider, or continue considering a dispute which the Referee believes in all the circumstances to be inappropriate for this procedure.

For example where:

1. The referee does not believe that the conduct complained of is covered by the FBAA Code of Practice and Code of Conduct & Dispute Resolution Service Rules.
2. The alleged breach is also, or could be, the subject of a dispute already covered by the DRS or an ADRS.
3. The substance of the dispute is, or has already been, the subject of consideration by the Referee, a statutory body, or other complaint or dispute resolution process, or adjudication by a court, tribunal or other legal process.
4. Insufficient information has been provided by the complainant to allow the Referee to properly consider the dispute.
5. The complaint is deemed by the Referee to be frivolous or vexatious or of improper purpose.
6. The Finance Broker's right to indemnity under a professional indemnity insurance policy may be seriously prejudiced if the matter was to proceed in the absence of consent by the relevant professional indemnity insurer and that insurer has refused or failed to provide an appropriate consent.

Where the Referee exercises the discretion referred to above, the Referee is required to provide written reasons for his/her decision to the complainant and where appropriate, any steps which the complainant must take before the referee will consider or continue to consider the alleged breach of the Code. Alternatively the complaintant is to be advised that they may progress the matter to an ADRS or other means of having their grievances heard.

Form of proceedings for determination of a dispute by Referee

Any proceedings will be at the absolute discretion of the Referee, it being intended that the Referee will function informally with a minimum of legal form and technicality. In particular, the Referee will have use their own discretion in determining:

1. The time and place of meetings between the relevant parties involved.
2. All evidentiary issues including any enquiries or investigations which the Referee may wish to undertake or expert advice or assistance which he/she may require. If expert advice is required, the expert's fees must be approved as being reasonable by the DRS having regard to the nature of the dispute.
3. Whether the proceedings should be terminated prematurely for any reason. The use of lawyers to represent parties will be discouraged but complainants or other persons with language or other difficulties may be assisted by a third party. Personal hearings will be held only if the Referee believes it is important to a fair and timely resolution of the dispute.

Time for determination, orders or sanctions

The Referee will determine the dispute and make such orders and impose such sanctions as are appropriate, within a reasonable period of time. In most instances, it should be reasonable for a determination and orders to be made, and sanctions imposed, within 20 working days of the Referee having received all relevant information. Determinations and orders made, and sanctions imposed, by the Referee will be given in writing along with reasons for the determination. The Referee will as soon as possible inform the complainant and Finance Broker of any determination and orders made and sanctions imposed. Any determination which the Referee believes to be of importance, having regard to the principles of the FBAA Code of Practice, will be made available and appropriately publicised.

Powers of the Referee - orders or sanctions

The Referee has the power in respect of a breach of the Code to:

1. Order the Finance Broker to attend to rectification procedures.
2. Order the Finance Broker to comply with the provisions of the Code or a specified provision of the Code.
3. Order the Finance Broker to undertake through an independent and appropriately qualified person an audit of its compliance procedures.
4. Order the Finance Broker to undertake, or require its employees or agents to undertake, professional education of a specific type.
5. Impose a timetable for compliance with the above orders by the Finance Broker.
6. Name the Finance Broker in the annual report of the Referee (where applicable).
7. Provide to any state, territory or federal government finance broker licensing or registration authority information and reports regarding breaches of the Code by a Finance Broker and any orders it makes and sanctions it imposes and the reasons for such orders or sanctions.
8. Recommend to any state, territory or federal government licensing authority that a Finance Broker's license or registration be cancelled or suspended for serious or continuous breaches of the Code.

Finance Broker bound by Referee's determination, orders and/or sanctions

A Finance Broker will be encouraged to accept any determinations of and comply with any orders made and sanctions imposed by the Referee.

Failure to comply with orders or sanctions imposed by Referee

Where a Finance Broker fails to accept a determination of, or comply with, orders made or sanctions imposed by the Referee, the Referee may make such other orders or impose further sanctions, as specified above as are appropriate and lawful. Before making or imposing such further orders or sanctions, the Referee will notify the Finance Broker in writing of its intention to do so. The Finance Broker will have the opportunity to make written representations to the Referee in respect of its non-compliance with the orders and sanctions and the Referee will not proceed to make or impose any further orders or sanctions before the expiry of 20 working days from the date the above notice being sent to the Finance Broker.

Acceptance of Referee's determination, orders and/or sanctions by Complainant

Whilst it is expected that a Finance Broker or complainant will accept the determination of and abide by any orders made and sanctions imposed by the Referee in relation to the dispute, non-acceptance will not prejudice any complainant's right to legal action, nor their ability to have the matter escalated to an ADRS (External Scheme). A complainant is encouraged to advise if it is satisfied with the Referee's decision within 20 working days as from the date the determination was issued in which to accept the Referee's determination, orders made, and sanctions imposed, in relation to the said dispute. Acceptance will be in a form satisfactory to the Referee.

Review by Referee of MO's decision to refuse to consider or continue considering a dispute which the MO believes is inappropriate for this procedure

Where the MO has decided to refuse to consider or continue considering a dispute which the MO believes is inappropriate for this procedure, the Referee may upon application by the complainant or the Finance Broker decide, based on information provided by the MO, whether the decision was appropriate or not. If the Referee decides that the decision was not appropriate, the Referee will refer the dispute back to the MO for conciliation along with written reasons for the Referee's decision and where appropriate, listing any steps which the Referee may require the complainant to take. If the Referee decides that the decision was appropriate, the Referee will inform the complainant in writing of the reason(s) for the Referee's decision.

Terms of Reference – Complaints Handling

Both the MO and Referee will be empowered with wide terms of reference to enable them to effectively and efficiently manage the dispute process. They will be guided by the procedures adopted from Guidelines of Standards Australia (AS4608-2004 and AS4269-1995).

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