External dispute resolution schemes
The Victorian and Commonwealth Governments have established dispute resolution schemes (also known as industry ombudsman services) in partnership with a number of industries dealing with credit and debt. These include the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman, the Telecommunications Industry Ombudsman (TIO) and the Energy and Water Ombudsman Victoria (EWOV). The schemes operate independently of the government and are funded by members of the industry they represent.
Consumers can access these schemes for free. They are not courts, but provide a dispute resolution process for people who do not have access to solicitors.
Taking your matter to a dispute resolution scheme
If your attempts to resolve a dispute with a creditor have been unsuccessful, you can write to the appropriate industry ombudsman service and ask for assistance. A creditor cannot take you to court while you have a complaint lodged with an industry ombudsman service. If a debt collector has bought the debt, your dispute is with the debt collector and you should lodge the complaint against them.
If you ask the industry ombudsman to investigate your dispute, you will have to authorise them to disclose the details you have shared with them to the creditor. They may request additional information and conduct an investigation as they try to resolve the dispute in a way that both parties accept.
This process may take a number of months. If a resolution is found, you and your creditor will be required to enter into a written agreement.
If you and your creditor continue to disagree, you can object to the proposed resolution in writing and ask for further examination of the dispute, and a formal decision from the ombudsman.
Rulings from the dispute resolution schemes include details about the rights, obligations and liabilities of both parties, and are binding on the creditor. If you are not satisfied with the outcome of the process, you may take the matter to a court for hearing and determination.
Limits of industry ombudsman schemes
The following are general provisions around the operation of industry ombudsman schemes:
- Lenders and debt collectors of consumer credit must be members of an approved external dispute resolution scheme. Currently the two approved schemes for them are the Financial Ombudsman Service and the Credit and Investments Ombudsman.
- Gas, water and energy companies are required to be members of the Energy and Water Ombudsman Victoria.
- All providers of telephone, mobile and internet services are required to be members of the Telecommunications Industry Ombudsman.
- When a complaint has been made to an industry ombudsman scheme, the lender cannot take steps to try to enforce the debt while the matter is being considered by the scheme.
- There are upper limits on the amount in dispute that industry ombudsman schemes can investigate. Currently these limits are $500,000 for both the Financial Ombudsman Service and Credit and Investments Ombudsman .
- Industry ombudsman schemes cannot consider a dispute that is based on the same event and facts and with the same parties as one which is or was the subject of court proceedings, but if no significant steps beyond issuing a court proceeding and filing a defence have been taken, then they can still consider it.