The Credit Ombudsman Service is an independent dispute resolution service for the Credit Industry. We consider complaints from consumers concerning the provision of credit products and services, such as mortgages and related products.

The COSL Handbook for Complaints will help you understand the COSL process. The questions outlined below will also provide you with relevant information on the COSL process.

• What happens when a customer makes a complaint?
• The Conciliation Phase
• The Determination Phase
• How is the complaint Determined?
• Enforcing a Determination
• Fees for complaint handling
• The Dispute Resolution Process

When a complaint is received by the Credit Ombudsman Service the first step is for the customer to be encouraged to try to resolve the complaint directly with the Member concerned by contacting their Complaints Contact Person.

The Credit Ombudsman Rules state that every Member must have a Complaints Contact Person and an Internal Dispute Resolution (IDR) Procedure in place. Click here for information about Credit Ombudsman IDR Procedures.

The IDR Procedures require you to give a substantive response to a complaint as soon as possible but must be within 45 days. A substantive response includes:

• Accepting the customers 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 customer reasons for your delay.

If the customer 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 (COS).

At this stage the COS will send details of the complaint and any accompanying documents to you. You must then give a response to the COS as soon as possible and within 21 days of receiving notification of the complaint.

The COS will send a copy of your response to the Customer.

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If the customer is not satisfied with your response at this stage they can ask the COS for help to resolve the complaint through a 'conciliation process'.

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

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If the complaint is not resolved by the end of the Conciliation Phase then the COS will refer the complaint to the Credit Ombudsman for Determination.

The Credit Ombudsman will decide what procedure to adopt in determining the complaint, in a manner which is fair to both the Member and the Customer. 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 Credit Ombudsman may give direction as to how the hearing will be conducted and as to whether legal representation is required. The Credit Ombudsman may also request relevant information or documentation be provided.

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At any stage during the Determination Phase the Credit Ombudsman can propose a Determination Settlement on terms which are fair to both parties. When determining a complaint the Credit Ombudsman will consider:

• relevant legal requirements
• the MIAA Code of Practice or other Recognised Code of Practice
• good practice in the Credit Industry
• fairness in all the circumstances

A Determination Settlement may include:

• a requirement that the Member pay compensation for any Direct Loss the Credit Ombudsman determines the customer has suffered, up to $100,000
• an order that the Member do, or refrain from doing, some act in relation to the subject matter of the complaint.

Once the Credit Ombudsman has proposed a Determination Settlement both you and the Customer have one month in which to accept and sign an agreement.

If the customer chooses not to sign at this stage the Credit Ombudsman may declare the complaint closed without resolution. If the consumer accepts but the Member fails to sign within one month the Ombudsman may make a binding Award in terms of the Determination Settlement.

Any Determination Settlement or Award made by the Credit Ombudsman will be in writing and will include a statement of reasons.

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

• can take action to suspend or cancel that Member's membership of the Credit Ombudsman Service.
• must give written notice of any suspensions or cancellations to ASIC.
• must give written notice of the fact to any relevant industry body of which that Member is also a member.
• can bring legal proceedings against the Member for recovery of the amount awarded.

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Members are charged Service Fees on a complaint by complaint basis. There are five fee categories based on the stage at which a dispute is resolved. You will normally be billed at Stage One after the initial contact, and at Stage Two, when a complaint is made. If the complaint continues through the Credit Ombudsman Service dispute resolution process the remainder of the costs will be billed once the complaint has been closed.

Click here for a breakdown of the Credit Ombudsman Service Fees

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Click here for a digram to explain the COSL Dispute Resolution Process.

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