FAQ for FSPs

Frequently asked questions by financial services providers

 

The Credit and Investments Ombudsman (CIO) is a not-for-profit company.

The Members of CIO are individuals, firms and corporations that operate in the credit and finance industry and who agree to be bound by the Credit and Investments Ombudsman Rules and any other recognised Code of Practice.

CIO has a Board of Directors which comprises:

  • an independent Chairman
  • an equal number of consumer and industry representatives.
 

The main objectives of CIO are to:

  • facilitate the resolution of complaints concerning all aspects of the provision of financial services to consumers by Members of the scheme. 
 

The Credit and Investments Ombudsman (CIO) began operating on 1 August 2000.

CIO was initially established by the Mortgage & Finance Association of Australia (MFAA, formerly MIAA) under the supervision of the Mortgage Industry Review Committee. CIO has been independent of the MFAA since 1st July 2003.

 

Any of the following financial service providers may be a CIO Member:

Credit industry participants

  • Australian Credit Licensee (ACL)
  • Credit Representatives
  • Mortgage or finance brokers
  • Originator,
  • Aggregator,
  • Mortgage manager,
  • Lender,
  • Securitisation manager,
  • Trust manager,
  • Master servicer or,
  • Programme manager of a securitisation programme,
  • Securitisation trustee,
  • Lenders Mortgage Insurer, as
    Intermediary between borrowers or intending borrowers and,
  • Credit providers

Provider of a financial service

  • Loan facility
  • Debt collection
  • Financial service
  • ADIs
  • Investment
  • Insurance 
 

Joining CIO is a key tool for managing risk and is essential for a successful business. By becoming a participant of our scheme you are demonstrating your commitment and high standards of service and performance within your day to day operations.

Your customers will have access to independent, experienced, and professional staff to assist them in resolving any complaint they may have about you.

Being a scheme participant can also save you money. By resolving the complaint through CIO, rather than dragging the complaint through the court system, the cost can be significantly less, not to mention less stressful and time consuming. 

 

 CIO has established a set of rules called the Credit and Investments Ombudsman Rules

These Rules set out:

  • who can make a complaint to the Credit and Investments Ombudsman
  • what matters can be the subject of a complaint
  • what matters are not covered by the Credit and Investments Ombudsman
  • what procedures apply for making a complaint to the Credit and Investments Ombudsman and having that complaint resolved.

The Credit and Investments Ombudsman is appointed and supervised by the Board. However, the day to day functions of the Credit and Investments Ombudsman are carried out by the Ombudsman.

The Ombudsman is responsible for:

  • managing the receipt and resolution of complaints
  • carrying out a conciliation role between consumers and members.

If a complaint is not resolved by conciliation it is referred to the Ombudsman for a binding determination or award. The Ombudsman’s determination is binding only if the consumer accepts it in full as final satisfaction of their complaint. 

 

To become a member of the Credit and Investments Ombudsman simply complete a CIO Member Application form and submit with your payment of the application fee and yearly membership fee.

 

An application for membership may be made by the individual trading, a company or by the partners in a partnership. When making your application, a person with the appropriate authority must complete and agree to being a CIO Member.

 

When joining CIO as an Australian Credit Licensee (ACL) holder, there is a one-off application fee.

In addition, there is a yearly membership fee, which is calculated according to the size and nature of your business either at the time you apply or renew your membership.

For more information please follow this link to our member fees page.

 

Members are charged service fees for complaints CIO receives about them. Service fees are charged according to the relevant stage in the complaints process. These fee stages are set out in the Complaint Fee Schedule which can be found on the Member Fees page.

 

Members pay an annual fee at application and at renewal of membership. Members are also required to pay additional fees for any representatives that they wish to add through the year. Members are also charged case fees for complaints the scheme receives about them. Case fees are charged according the relevant stage in the complaint process. These fee stages are set out in the Complaint Fee Schedule which can be found on the Member Fees page. 

 

If you hold an ACN, you can provide this without providing your ABN. However, if you only hold an ABN, it is not necessary to apply for or provide an ACN.

 

No, you do not need to be a member of the Mortgage and Finance Association of Australia (MFAA) or any other industry or professional association to become a CIO Member. While many CIO Members may also belong to one of a number of professional or industry bodies or associations, it is not a requirement for CIO membership.

If you are a Member of an industry body or association you may be required to adhere to or follow certain practice standards or abide by a code of practice for Members of that association.

 

If you wish to authorise a Credit Representative under your Membership, you will need to advise us in writing of the authorisation.

Once we have received the authorisation letter along with a Membership application for a Credit Representative (unless already a Member or being added under a credit representative membership) the Credit Representative will be noted under the Membership.

 

In some circumstances you may need to be, or wish to be, a member of more than one EDR Scheme. EDR Schemes have rules which govern the handling of complaints about Members who are also Members of more than one scheme. In general, a complaint will not be considered by an EDR scheme if it has been previously considered by a court, tribunal or other EDR scheme.

 

For information about engaging in activities relating to financial services and/or products, and any obligations to maintain EDR membership, please consult the relevant body, such as the Australian Securities & Investments Commission (ASIC). 

 

 In the case of a partnership, we will register the partners as the Member and will record the partnership and/or trading names on your Membership. 

 

For information about engaging in activities relating to financial services and/or products, and any obligations to maintain EDR membership, please consult the relevant body, such as the Australian Securities & Investments Commission (ASIC).

 

Completed forms should be sent to:

CIO Membership Office
Credit and Investments Ombudsman Limited
PO Box A252, Sydney South NSW 1235
E members@cio.org.au
F 02 9273 8445

 

There may be an additional fee payable depending on the number of Credit Representatives an ACL authorises. Please contact our office for more information.

Those employees and/or directors of the ACL engaged in credit activities are considered representatives of the ACL and are required to be included in the membership fee at application, renewal and when any additions are made throughout the membership year. The fee is $125 per representative. 

 

Partners registered as a Member must, within five business days of a change of composition of the partnership, notify us of the names of the persons who have ceased to be partners and the names of the persons who have become partners as well as the dates upon which each such change occurred. 

 

Your CIO Membership will cover all working directors and employees of the Member. If you are an Australian Credit License (ACL) holder, a Credit Representative with a separate CIO Membership, will also be covered. Credit Representatives will need a written authority from the ACL holder.

Financial Planners and Advisers who are Authorised Representatives of an Australian Financial Services (AFS) licence holder are covered under the licensee’s Membership. 

 

Your CIO Membership will cover all working directors and employees of the Member. If you are an Australian Credit License (ACL) holder, a Credit Representative with a separate CIO Membership, will also be covered. Credit Representatives will need a written authority from the ACL holder.

Financial Planners and Advisers who are Authorised Representatives of an Australian Financial Services (AFS) licence holder are covered under the licensee’s Membership. 

 

When your application and payment has been received, you will receive notification from CIO along with your membership number. We make every attempt to process your Membership as quickly as possible, generally within seven working days. 

 

When your application and payment has been received, you will receive notification from CIO along with your membership number. We make every attempt to process your Membership as quickly as possible, generally within seven working days. 

 

Your Membership is due to be renewed every 12 months on the anniversary of your Membership application approval.

We will send you a renewal form to either your registered email address or postal address. If we cannot reach you, and your Membership lapses, you can contact us and we can forward the renewal form to you once we have updated your details. 

 

By removing a Credit Representative from an ACL holder’s Membership, the Credit Representative’s Membership will not be affected and still be active, however the link between the two will simply be removed.

 

A CIO decision is only binding on a consumer if the consumer accepts it. If the consumer does not accept a CIO decision, the consumer is at liberty to pursue other remedies through the courts or any another forum.
 
The Ombudsman's decision is binding on the Member once a consumer has accepted it.

 

ASIC’s Regulatory Guide 139 and the CIO Rules require that the complaints process is free for consumers.  Consequently, Members are charged fees for complaints received about them. There are different fees applicable depending on the stage at which a complaint is resolved, and how many complaints have been recorded against your Membership.

 
If a complaint goes to a hearing, each party bears its own legal costs and expenses. In general, the Ombudsman will not make an award of costs.
 
However, costs may be awarded against a Member if a hearing has been held in relation to a complaint because the Member specifically asked for it. In that case, the Member will be required to meet the reasonable costs of the consumer attending the hearing, including travel and accommodation. 
 
When CIO receives a complaint, the first step is to ensure the consumer has approached the Member to try and resolve it through the Member’s Internal Dispute Resolution process.

CIO’s Rules state that every Member must have a Complaints Contact Person and an Internal Dispute Resolution (IDR) Procedure in place.
The IDR Procedures require you to give a substantive response to a complaint as soon as possible but generally within 45 days (except for certain types of complaints, where a shorter timeframe applies). A substantive response includes:
 
  • Accepting the consumer’s complaint and where appropriate offering redress
  • Offering redress without accepting the complaint
  • Rejecting the complaint
  • If you are unable to give a substantive response within 45 days, you must give the consumer reasons for your delay.

If the consumer has been through your IDR Procedure and is not satisfied with the outcome, they are entitled to make a formal complaint to the Credit Ombudsman Service (CIO).

At this stage, CIO will send details of the complaint and any accompanying documents to you. You must then give a response to CIO as soon as possible and within the time CIO specifies.
 

If the customer is not satisfied with your response they can ask CIO for help to resolve the complaint through a ‘conciliation process’.

During the Conciliation stage CIO can:

  • facilitate informal negotiations between you and the customer
  • conduct alternative dispute resolution processes, such as mediation
  • make recommendations to you and the customer about resolving the dispute
  • prepare a ‘Conciliation Settlement’ if an agreement is reached at this stage.
  • We try to complete this process within 45 days, however in some cases this can be extended to 90 days.

If CIO forms the view that it will be unable to further assist the parties to achieve resolution of the complaint in the conciliation phase, CIO may declare the conciliation phase completed. 

 

Failing to take consumer complaints seriously is bad for business, and can prove costly.

If you are a Member, not responding to a complaint made to CIO can also result in higher complaint fees. Failing to respond to CIO's requests to resolve a complaint can also result in a finding by the Ombudsman that may not be in yourfavour.

In addition, the longer it takes to deal with a complaint, the more expensive it is. Members are billed for each complaint based on the stage at which it is completed. It is in the interest of Members that our requests are responded to as quickly as possible. 

 

If the complaint is not resolved in the Investigation phase, CIO will then refer the complaint to the Ombudsman for a Determination.

The Ombudsman will decide what procedure to adopt in determining the complaint, in a manner which is fair to both the FSP and the consumer. This usually involves considering a complaint based on the documentary evidence supplied or in exceptional cases by holding a hearing.

If a hearing is conducted, the Ombudsman will give direction as to how the hearing will be conducted and if any legal representation is required. The Ombudsman may also request relevant information or documentation be provided.

 

The Ombudsman may require in the Determination that the FSP:

  • pay compensation for any direct loss the Ombudsman determines the consumer has suffered, up to $309,000. 
     
  • do, or refrain from doing, some act in relation to the subject matter of the complaint.

If the consumer accepts the Determination, the Determination becomes binding on the Member.

If the consumer chooses not to sign, the Ombudsman may declare the complaint closed without resolution. If the consumer accepts but the Member does not accept, the Ombudsman may make a binding Award in terms of that Determination.
 
Any Determination or Award made by the Ombudsman will be in writing and will include a statement of reasons. 
 

The Ombudsman can propose a settlement on terms which are fair to both parties. When determining a complaint the Ombudsman will consider:

  • relevant legal requirements
  • relevant industry recognised code of practice
  • good practice in the financial services industry
  • fairness in all the circumstances
 

Once the Ombudsman has made a Determination or Award, you are given 28 days written notice to comply. If a Member fails to comply, the Credit and Investments Ombudsman:

  • can take action to suspend or cancel that Member’s membership
  • must give written notice of any suspensions or cancellations to ASIC
  • can bring legal proceedings against the Member for recovery of the amount awarded. 
 

Once the complaint has been closed, email our accounts department and state:

  • the CIO Membership number; and
  • the complaint number to which the rebate is to be applied.

Once we receive your request, the complaint fee/s will be refunded or waived within seven working days.

Please follow this link for more information about complaint fee rebate.

 

The rebate can only be used once in a membership year (a membership year is the 12 month period commencing on the effective date of CIO membership application or renewal). 

 

The complaint rebate can only be used for complaint fees and does not apply to:

  • awards (Orders) made by the Ombudsman against a Member; and/or
  • actual costs of expert advice obtained by CIO; and/or
  • actual costs of third party mediation.
 
The rebate is only valid for one complaint and cannot be used to obtain a refund of complaint fees on another complaint.
 

The free complaint rebate can be used if it meets the following criteria:

  • the complaint was received by CIO after 31 January 2007; and
  • CIO has closed the complaint; and
  • any fee/s invoiced by CIO have been paid by the due date (a fee refers to a membership fee, renewal fee, complaint fee or additional fee); and
  • if the Complaint Fee/s for which the complaint rebate is intended to be used have been paid by the due date.
 

The complaint rebate will expire immediately and without notice as a result of any of the following occurring:

  • the refund of the relevant complaint fees, or
  • the non-payment of a membership fee, renewal fee, complaint fee or additional fee by the due date; or
  • the member’s membership not being renewed by the due date, or
  • the date of the member’s notice of its intention to resign, or
  • the date of cancellation of the member’s membership or the date on which the member is expelled. 
 

No, the free complaint rebate is not transferable and does not accumulate.

Members are only entitled to one free complaint per year, the free complaint does not accumulate if not used within 12 months of application or renewal of membership each year.