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ombudsman principles

principle 4: effectiveness

Effective approaches to fundamental principles guide: part 5

Effectiveness is a fundamental principle

which members should aspire to comply with, so far as it is within their control


5.1 There should be:

• a clear definition of what constitutes a complaint; and

• clear obligations on financial businesses to deal with complaints fairly and promptly.


5.2 Financial ombudsman schemes should:

• have a flexible and informal process (where parties do not need professional advisers);

• have skilled decision-makers; and

• be properly resourced.


Effective approaches

that have worked in some countries, though there may possibly be other ways.


Obligations for financial businesses


5.3 What constitutes a complaint is clear, and documented. For example:

• can it be any oral/written expression of dissatisfaction; or

• does it have to be a formal complaint in writing?


5.4 Financial businesses within the financial ombudsman scheme’s jurisdiction are required to:

• have an accessible, effective and fair internal complaints process, which is published;

• issue a written response to a complaint, with reasons, within a specified time;

• tell complainants that, if they are still dissatisfied, they can go to the ombudsman scheme;

• have a single person with overall responsibility for the handling of complaints;

• respond promptly to communications from the ombudsman scheme;

• provide information and documents requested by the ombudsman scheme; and

• comply promptly with the ombudsman scheme’s decisions.


Informal and flexible process


5.5 The financial ombudsman scheme has an informal and flexible process, so that neither party needs a lawyer or advisor (though parties are not prohibited from using a lawyer/adviser if they want to).


5.6 The financial ombudsman scheme:

• handles enquiries, to resolve some problems before they turn into full-blown disputes;

• takes an active role in deciding what evidence is required and calling for it;

• obtains expert reports when these are necessary;

• uses informal mediation to reach a fair settlement, where this is possible and appropriate; and

• issues a formal decision in cases that are not settled.


Information, advice and training


5.7 The financial ombudsman scheme assists early resolution of complaints by:

• publishing details of its approach to common disputes;

• giving advice to consumers and financial businesses; and

• helping train consumer advice centres and financial businesses’ complaint departments.


Knowledge and skills


5.8 Financial ombudsman scheme decision-makers:

• have the necessary knowledge and skills in resolving disputes;

• have a general understanding of law;

• have knowledge of relevant financial services; and

• are appropriately trained.


Financial ombudsman resources


5.9 The financial ombudsman scheme is:

• adequately staffed;

• adequately funded;

• efficient; and

• cost-effective

 so that disputes can be effectively and expeditiously investigated and resolved.






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