Roadmap to Resolution

1. Roadmap to Resolution

2. Map for Today M1 Presenters: Ralph Haller-Trost (FOS Codes Team) Chris Stuart-Walker and Steph Booth (EWOV) Jessica Hunter (TIO)

3. Aims of today’s session M1 To provide financial counsellors with: • A better understanding of the role of Ombudsman schemes and how we operate. • Greater awareness of the various legislative and code based tools that exist within each industry. • A practical understanding of how industry codes and legislation can be actively used by financial counsellors to advocate for fair and reasonable resolutions.

4. Ombuddies M1 Partnership of Ombudsman schemes and financial counsellors is very important: • Fair and timely resolution of individual complaints • Enables Ombudsman schemes to better engage with vulnerable consumers • Increases the visibility and voice of financial counsellors amongst industry leaders • Grass root insights into systemic issues can influence development/review of law and industry codes • Encourages industry participants to lift their game, identify and address root causes and reduce complaints

5. Regulation vs Resolution M1 When it’s about enforcing rights: When it’s about industry practice: Ombudsmen, Courts and Tribunals Code compliance bodies and Regulators

6. Solutions EXIT HERE M1 CODES LAW STANDARDS (ISO/AS) COMPANY GUARANTEES POLICIES AND CHARTERS G GUIDE LINES

7. Cross Industry Tools M1 Other tools we all use: • Privacy Act 1988 (FOS, EWOV and TIO all recognised EDR schemes for purpose of this Act) • Credit Reporting Privacy Code • ACCC/ASIC Debt Collection Guidelines • Australian Consumer Law (Competition and Consumer Act 2010)

8. FOS CODE TEAM M1 FOS EDR • Disputes (Terms of Reference and the FOS Approach) FOS CODE Team • Code Compliance: investigate, monitor and engage Which Rules? • Code of Banking Practice • General Insurance Code of Practice • Customer Owned Banking Code of Practice • Insurance Brokers Code of Practice

9. Code of Banking Practice (5/2004 & 2/2014) - FSPs: 13 banks • - Individual & small business customersCCMC • General Insurance Code • (7/2006, 5/2010, 7/2012 & 7/2014) - FSPs: c. 54 general insurers & c. 102 Lloyds Australia Limited cover holders • - Policy holders and uninsured third parties (debt collection) • CCC FOS CODE TEAM M1 • FOS Code Team • Mutual Banking Code of Practice (7/2009 & 1/2014) & Customer Owned Banking Code of Practice (1/2014) - FSPs: C. 91 - Individual & small business customersFOS: Code Compliance Manager • CCC Insurance Brokers Code (1/2007 & 1/2014)- FSPs: c. 387 insurance brokers- FSPs’ clientsFOS: Code Compliance ManagerCCC

10. FOS CODE TEAM M1 • Code of Banking Practice1 Feb 2014 - handout • GI Code - 1 July 2014 (transition by 1 July 2015) • Insurance Brokers – 1 January 2014 • Mutuals – > Customer Owned Banks1 January 2014. Transition by 1 July 2014 To work out which Code applies look at when the event happened. If it happened when the old Code was in place, the old Code applies.

11. EWOV M1 Our Role • Dispute resolution for Victorian energy and water customers • Laws and codes are the minimum standard in EWOV’s ‘fair and reasonable’ framework for dispute resolution • EWOV reports on systemic issues to relevant regulators. Which Codes? • Energy Retail Code (Electricity and Gas) - Vic • Energy Assured Code of Practice - National • Electricity and Gas Distribution Codes - Vic • Victorian LPG Retail Code - Vic • Customer Service Codes (water) - Vic

12. TIO M1 Our Role • Primary function is dispute resolution • Consulted when industry codes are created/reviewed • No compliance/regulatory functions - reporting and complaint resolution only Which Rules? • Telecommunications Consumer Protections Code • Mobile Premium Services Code • Universal Service Obligation • Customer Service Guarantee • International Mobile Roaming Standard

13. Complaint Handling Tips M1 • Always make complaint to supplier/service provider in first instance • Identify and address underlying cause of the complaint (more coming on this) • Undisputed charges must be paid • Help consumers to think of range of options that may be fair and reasonable • Consumers must tell their provider if they can no longer meet a payment arrangement • Gather together a package of evidence

14. Digging for Resolutions M1 • Complaints are not always what they seem on face value • EDR schemes must maintain independence • Consumers often describe complaints too narrowly • Financial counsellors can make a significant impact by: • Determining the root cause of the complaint • Tailoring the proposed resolution to that root cause

15. Framing Complaints M1 Scenario A Scenario B

16. The consumer’s voice QUESTIONS M1

17. Break for morning tea Resume at 10:45am

18. Codes/Law in Practice M1 Case study will be presented in segments. Each segment will introduce a new theme for exploration: • Financial hardship • Access and transparency • Preventing unmanageable debt • Debt Collection Practices • Credit Reporting • Dispute Resolution We will respond to each theme as a panel, giving you tips on how industry codes can help you in your day to day work. Please feel free ask questions as we work our way through the case study.

19. Case Study – Part 1 M1 Setting the Scene

20. The consumer’s voice M1 Case Study – Part 2 M1 Theme: Financial Hardship

21. Financial Hardship M1 M1 • FOS CODE TEAM SAYS • Bankscl 25.2 (2004) or cl 28 (2013) • Customer Owned Bankscl 24 (2010 & 2014) • GI CodeThird parties cl 3.11-3.13 (2012) or cl 8 (2014)Customerscl 3.8 (2012) or cl 7.7 & 8 (2014) • EDR: FOS Approach to Financial Difficulty • EWOV • SAYS • Clauses 8-12A – Energy Retail Code state: • Before disconnecting a hardship customer: • provide energy efficiency advice • have offered two payment plans in the previous 12 months • send a registered letter or visit the customer’s property • Payment plans must be in-line with customer capacity to pay. • TIO • SAYS • Clause 6.11.1 – TCP Code • Summarise hardship policy when appropriate • Clause 6.12.1 – TCP Code • Flexible payment plans tailored to individual circumstances • Clause 6.14.1 – TCP Code • No credit management during hardship arrangement

22. Case Study – Part 3 M1 Theme: Access and Transparency

23. Access and Transparency M1 M1 EWOV SAYS Energy Retail Code - Part 8 - Clauses 26 and 27 Urban Water Customer Service Code - Clause 12 Victorian LPG Retail Code (LPG Code) - Part 9 - Clause 20 • FOS CODE TEAM SAYS • GI Code • Claim denial • cl 3.5 (2010) or cl 7.19 (2014) • Banks Plain language cl 2.1(d)(2004) or cl 3.1(d) (2014)Ts & Cscl 10 & 18 (2004) or cl 12 & 20(2010)Copies of Documentscl 11 (2004) or cl 13 (2013) • TIO SAYS • Clause 3.1.1/3.2.1 – TCP Code • Accurate, relevant, current and timely info in plain language • Clause 3.3.1 – TCP Code • Tailor communication to communication needs • Clause 4.3.4(d) – TCP Code • Tell consumer nature of reasons behind any service refusal

24. The consumer’s voice Case Study – Part 4 M1 Theme: Preventing unmanageable debt

25. Debt Prevention M1 M1 • EWOV SAYS • Clauses 8-12A – Energy Retail Code • rules for credit practices • payment and instalment plans • financial hardship • shortened collection cycles • assistance that should be provided to customers in financial hardship • payment plans must be offered to customers in hardship in-line with their capacity to pay. • TIO SAYS • Clause 6.2.1 – TCP Code • Credit assessments and guarantor awareness • Clause 4.1.2 – TCP Code • Critical Information Summaries for all offers • Clause 4.1.4 – TCP Code • Offer products to suit stated needs • Clause 6.5.2 – TCP Code • Spend notifications at 50%, 85% and 100% • FOS CODE TEAM SAYS • Bankscl 25.1 (2004) or cl 27 (2013) • Customer Owned BanksKP 6 & cl 6 (2010) orKP 4 & cl 6 (2014) • FOS EDR–Maladministration in lending.

26. The consumer’s voice Case Study – Part 5 M1 Theme: Debt Collection Practices

27. Debt Collection M1 M1 • FOS CODE TEAM SAYS • Banks • cl 29 (2004) or cl 32(2013) • Customer Owned Banks • cl 26 (2010 & 2014) • GI Codecl 3.11-3.13 (2012) third partiescl 8.3-8.13 (2014) customers/third parties • ACCC/ASIC Debt Collection Guideline and the Centrelink Code (10% rule) • EWOV SAYS • Clause 11.4 – Energy Retail Code • Must not commence legal proceedings to recover a debt: • unless it has complied with all requirements of Clause 11.2 • if a customer is adhering to an agreed payment plan. • Energy companies must comply with ACCC’s debt collection guidelines and the ACL. • TIO SAYS • Clause 6.7.1 – TCP Code • Notice of restriction, suspension or disconnection • Clauses 6.9.1/8.2.1(v) – TCP Code No credit management on disputed amounts • Clause 6.10.1(a) – TCP Code Before a debt can be referred, sold or credit listed, must follow all credit management code processes.

28. The consumer’s voice Case study – Part 6 M1 Theme: Credit Reporting

29. Credit Reporting M1 M1 • Credit Reporting Privacy Code and Privacy Act 1988 • If it isn’t covered by the Act/Code, it is unlawful. • An individual cannot be default listed when they are under 18, or when the information relates to an act that took place before they turned 18 • Credit files may now include repayment history • Before a provider can report a default the debt must be $150 or more, and over 60 days old. • A default cannot be recorded twice in relation to the same debt (i.e. debt buyer cannot re-issue a default if the consumer doesn’t pay) • Defaults last for 5 years and will only be updated to ‘paid’ status if paid within 5 years.

30. Credit Reporting M1 M1 • Serious credit infringements – last for 7 years and can only be reported in limited circumstances. • Individuals must be given access to credit reporting information held about them upon request and within a reasonable period, for free if no other requests for this within the last 12 months • the CRB must present the information clearly and accessibly and provide reasonable explanation and summaries of the information to assist the access seeker to understand the impact of the information on the individual’s credit worthiness • Where inaccuracy in credit related information is confirmed, credit providers and credit reporting bodies must take reasonable steps to correct the information within 30 days, unless the individual agrees to a longer period in writing.

31. Credit Reporting M1 M1 • FOS CODE TEAM SAYS • Banks • Fair & Reasonable cl 2.2 (2004) or cl 3.2 (2013) • Privacycl 3 & cl 22 (2004) or cl 4 & cl 24 (2013) • Customer Owned Banks • KP 1 (2010 & 2014) • Default listing complaints can be referred to FOS • EWOV SAYS • Repayment history not recorded on credit file for utilities. • EWOV applies the principles of the Credit Reporting Guideline and the Privacy Act as a minimum standard of what is fair and reasonable when investigating credit default listing cases. TIO SAYS No telecommunications related repayment history TIO Position Statements Additional fees included in the total amount reported to credit reporting body that don’t need to be 60 days overdue. A provider should report a default no later than one year after the debt becomes overdue.

32. The consumer’s voice Case Study – Part 7 M1 Theme: Dispute Resolution

33. Dispute Resolution M1 M1 • FOS CODE TEAM SAYS • Banks • cl 36 (2004) or cl 38 & 39 (2013) • cl 35 (2004) or cl 37(2013) • Customer Owned Bankscl 29 (2010 & 2014) • GI Codecl 6.10-6.14 (2012) or cl 10.20 - 10.24 (2014)cl 6 (2012) or cl 10 (2014) • ASIC RG 165 • TIO SAYS • Cl 8.2.1(a)(i) – TCP Code Acknowledging written complaints • Cl 8.1.1(a)(vii) – TCP Code How complaints can be made • Cl 8.1.1(a)(viii) – TCP Code Internal complaint escalation • Cl 8.2.1(a)(xiii) – TCP Code Resolutions within 10 days • Cl 8.2.1(a)(iv) – TCP Code Tailor remedies to root cause • EWOV SAYS • Energy companies must follow Australian Standard on Complaints Handling. • Customers must be informed about internal complaint escalation options, and if IDR fails then must provide EWOV contact information. • EWOV’s details on all disconnection /restriction warning notices.

34. Towards Resolution M1 M1 What could we each do to help this client? • FOS (EDR & Code Team) • TIO • EWOV

35. When to refer to EDR M1 When to refer to EDR scheme: • You have complained directly to the retailer/provider or made reasonable attempt to complain, and: • a resolution has not been offered at all • a resolution has been offered but is unfair in the circumstances • a resolution has been agreed to but not actioned Make sure you have: • Relevant evidence/documentation (e.g. credit file, receipts, bill copies, debt collection letters) • Asked questions of the client which drill down into underlying cause of the complaint • Formulated a preferred resolution that addresses the underlying complaint driver

36. The consumer’s voice MAKE YOUR OWN… M1 POCKET-SIZED INDUSTRY CODE TOOLKIT!

37. The consumer’s voice QUESTIONS M1