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ombudsman principles

principle 4: effectiveness

Effective approaches to fundamental principles: 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

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


5.2 A financial services ombudsman scheme should:

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

• have skilled decision-makers

• be properly resourced.


Effective approaches

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


Obligations for financial services businesses


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

• whether it can be any oral/written expression of dissatisfaction

• whether it has to be in writing.


5.4 Financial services businesses within the financial services 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

• comply promptly with the ombudsman scheme’s decisions.


Informal and flexible process


5.5 The financial services 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 services 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

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


Information, advice and training


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

• publishing details of its approach to common complaints

• giving advice to consumers and financial services businesses

• helping train consumer advice centres and financial services business complaint departments.


Knowledge and skills


5.8 Financial services ombudsman scheme decision-makers:

• have the necessary knowledge and skills in resolving complaints

• have a general understanding of law

• have knowledge of relevant financial services

• are appropriately trained.


Financial services ombudsman resources


5.9 The financial services ombudsman scheme is:

• adequately staffed

• adequately funded

• efficient

• cost-effective

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








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