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Ombudsman’s approach
The role of the Ombudsman is to investigate and resolve complaints in accordance with the Terms of Reference of the Financial Co-operative Dispute Resolution Scheme (FCDRS). The Ombudsman is not bound by legal rules of evidence and relies on, and draws inferences and conclusions from, available written material.
The following apply in relevant circumstances:
- applicable and binding industry codes of practice or guidelines
- good industry practice
- the FCDRS constitution (and the responsibilities it places on financial service providers)
- any applicable rule of law or relevant judicial authority and
- what is fair and reasonable in all the circumstances to both parties to the complaint.
All available information is considered, and both parties to the complaint are given the opportunity to respond to issues raised. It follows that decisions made are based upon relevant documentation and assumptions are made re what is likely to have occurred on the balance of probabilities.
Determination
The final step in the dispute resolution process is a determination by the Ombudsman. If the finding is in favour of the consumer, both parties will be notified of the determination. Only the consumer has the option of accepting or rejecting the determination as it is binding on the FSP. If acceptable to the consumer, the determination will be legally binding on the financial service provider (FSP) which will be given ten days to take whatever steps are necessary to fulfill the directions given by this office.
Consumers may, within fourteen days of receiving the notice, notify the FCDRS that they
accept the determination as a full and final settlement of the dispute, in which case the determination becomes binding on each of the parties or
reject the determination, in which case the FCDRS will notify consumers of their right to pursue the dispute by other legal means, including by reference to any court, tribunal or other body having jurisdiction to deal with the dispute. Failure to advise the FCDRS of acceptance or rejection within the fourteen days of receiving the notice will be taken as a rejection.
In some cases the determination will be partly in favour of both parties. In these instances, an acceptance must still be signed by the consumer.
Case Summaries
CASE STUDY ONE
At what stage is a home loan approved?
Mr C was in the market for his first home.
Dispute Circumstances
Mr C contacted his building society about the prospect of obtaining a home loan. After supplying some information to a loans officer over the phone he believed that once he found the right house he would be able to borrow up to $80 000. Read more
CASE STUDY TWO
Too little information…too much assistance
Miss A borrowed $12 000 as a personal loan from her credit union to purchase a car. As a condition of the loan she also obtained comprehensive car insurance. Repayments for the insurance were to be direct-debited from her savings account. Read more
CASE STUDY THREE
Liability for credit card loss
Mr and Mrs R lodged a dispute with the FCDRS Ombudsman when their building society refused to give them a refund for amounts fraudulently charged to their credit card. Read more
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CASE STUDY FOUR
Capacity to repay is vital
In July 2001 a loan of $20 000 was granted to Ms A by her credit union in return for a registered bill of mortgage over the house in which she lived. Read more
CASE STUDY FIVE
Don't leave it too long before lodging a dispute.
Before going into hospital in May 2002 Mrs K advised her credit union she had lost her credit card and required a replacement. She came home from the hospital a week later and went to a branch of the credit union to make a withdrawal, only to be told her account was overdrawn. Read more
CASE STUDY SIX
Weird things do happen!
Ms L was extremely upset when she found an ATM transaction on her account for a withdrawal of $320.97. Read more
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CASE STUDY SEVEN
PINs and family members don't mix!
Ms M lodged a dispute about monies taken from her account via ATM withdrawals. After the first allegedly fraudulent withdrawal of $2400 Ms L reported the incident to the credit union and a new card and PIN were issued. Subsequently a further $8000 was withdrawn. Read more
CASE STUDY EIGHT
Irresponsible actions always have a price
Mr S's dispute concerned a Visa transaction that appeared on his account. Mr S originally rented a car for 3 days and then extended it for another 6 days. The car was returned by a colleague, Mr B. Read more
CASE STUDY NINE
Stolen handbag leads to $1 000 loss
Mrs H, an elderly pensioner, had her handbag stolen from her home one afternoon in May. The handbag had been on the kitchen table and in it was a purse that contained her credit card. Nothing else was taken and it was some hours before she realised she had been robbed. Read more
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CASE STUDY TEN
WHERE HAS ALL THE MONEY GONE
One Saturday morning Mrs M went to use her credit card at a service station. The card was declined with the advice the daily limit had been exceeded. Read more
CASE STUDY ELEVEN
Taking out Insurance
In February 1995 Mr M borrowed $10 000 from his credit union to purchase a motor vehicle. Included in the loan was an amount of $772.44 for insurance to cover the repayments if an accident or sickness prevented him working during the term of the loan.Read more
CASE STUDY TWELVE
Are consumers "in the red" usually entitled to receive benefit payments
On Wednesday 3 December 2003 Mr S telephoned to advise he had visited a branch of his credit union to collect his benefits only to find it was holding a majority of his payment against overdrawn funds on the account. Read more
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CASE STUDY THIRTEEN
When are "available" funds really yours?
Mr and Mrs T have an internet business selling equestrian equipment. On 12 June 2003 they received an online order for a saddle and were requested to ship the items to Nigeria. Read more
CASE STUDY FOURTEEN
"Hide your PIN"
Mr D went out on 29 July and left his wallet on the kitchen table. When he arrived home he discovered there had been a burglary and his wallet was amongst the items stolen. Read more
CASE STUDY FFIFTEEN
Unnecessary harassment??
Mr R had a problem with alleged harassment and unfair legal costs over a credit union debt. Read more
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CASE STUDY SIXTEEN
Incorrect payout compromises loan serviceability
Five days before settlement on the sale of Ms H's property, and another property purchase elsewhere, the financial services provider (FSP) realised the loan payout amount was significantly higher than the figure previously provided to Ms H. Read more
CASE STUDY SEVENTEEN
FSP may have to pay if EFT disputes are handled inappropriately
While Mr A was playing tennis, an unauthorised transaction of $1000 was withdrawn from his account. Mr A's claim for a refund on the basis that he did not make the transaction was refused by the financial services provider (FSP). Read more
CASE STUDY EIGHTEEN
A stolen purse and compromised PIN costs FSP and the consumer
Ms K's purse was stolen while she was out shopping one afternoon. Her claim was rejected by her financial services provider (FSP) as it believed the PIN had been compromised by the consumer. Read more
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CASE STUDY NINETEEN
Stolen Visa Card affected credit rating
Before using his new Visa Card, several unauthorised transactions took place which subsequently affected Mr E's credit rating. Read more
CASE STUDY TWENTY
Centrelink recipient in need of assistance
Mr and Mrs P were happily married with four young children. Mr P was keen to establish a transport business and obtained a truck worth $25 000 from Mrs M on the basis that the value of the truck would be treated as a loan. Within a short time the business failed and after selling the truck Mr P was left with a residual debt of $5 500 to Mrs M. Read more
CASE STUDY TWENTY ONE
$1000 of unauthorised withdrawals on stolen card
While in hospital, Mrs P’s wallet was stolen from her handbag in her bedside locker, and $1 000 was withdrawn from her account. Read more
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CASE STUDY TWENTY TWO
Failure to follow Code requirements finds financial service provider (FSP) liable for unauthorised transactions
Mr and Mrs B were travelling around Australia when Mr B had his wallet stolen from the glove box of his car. Read more
CASE STUDY TWENTY THREE
Request for a mortgage insurance premium refund declined
Mr and Mrs D paid their home loan out early and then sought a refund on their mortgage insurance premium. Read more
CASE STUDY TWENTY FOUR
Secure your Internet Banking
While completing some online banking transactions Mr D's computer was infected with a virus. His details were accessed by an unknown user resulting in unauthorised withdrawals from the account. Read more
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CASE STUDY TWENTY FIVE
$3 500 of unauthorised withdrawals made on stolen credit card
Mr S had his wallet stolen while overseas and it was 72 hours before he reported the loss of his credit card. Read more
CASE STUDY TWENTY SIX
Reversal of payroll affects members
A credit union had an informal agreement with XYZ Company to credit funds from a payroll listing to nominated members' accounts prior to receiving the funds from XYZ. Read more
CASE STUDY TWENTY-SEVEN
The dangers of pre-signed withdrawal forms
In 2000 Mr L went on a holiday overseas for several months. He left several signed withdrawal slips with his mother to be used to pay for family birthday presents while he was away. Read more
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CASE STUDY TWENTY EIGHT
Duty of Confidentiality
Mr Y fell into arrears on his car loan and the collections department of his financial service provider (FSP) began contacting him to discuss repayment of the debt. Read more
CASE STUDY TWENTY NINE
'Both to sign' can be a prudent requirement on joint accounts
Mr and Mrs G were a married couple with a joint line of credit. The financial service provider's account was in both names and was able to be accessed with either party's signature. Mrs G's pay was deposited into the account fortnightly and it was frequently accessed for large amounts. Read more
CASE STUDY THIRTY
Joint Property Headaches
Mr N and his partner Ms M obtained a joint loan to purchase a property. Soon after, they began to have problems in their relationship and decided to separate. They both moved out of the property and arranged to rent it to tenants. Read more
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CASE STUDY THIRTY ONE
Skimming device on ATM costs FSP
Mr P went on an overseas trip to London and South Africa. On his final day in London he used his Visa debit card to withdraw (in the Australian dollar equivalent of pounds sterling) $200 from an automated teller machine (ATM) in South London to cover expenses until he arrived in South Africa. Later in the day his camera was damaged and he attempted to withdraw a further $100 to fix it but the transaction was declined. Read more
CASE STUDY THIRTY TWO
Disclosure of PIN to family member costs consumer
Mrs F gave her savings account card and Personal Identification Number (PIN) to her son to withdraw $300 as a loan. He withdrew the money and returned the card to her at 4:00 pm on the same day. Read more
CASE STUDY THIRTY THREE
Changing Superannuation Plans
Ms Y requested information in September 2005 about changing her investment option within her FSP’s superannuation plan. She was informed she could not access the plan until the new Product Disclosure Statement (PDS) was produced. The FSP said it would be completed ‘in a few weeks’. Read more
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CASE STUDY THIRTY FOUR
Overdrawn Visa card causes trouble
Mr F approached a FSP branch to enquire about a Visa debit card. He subsequently said staff had told him that under no circumstances would he be able to overdraw on the account and that once the balance reached zero no further withdrawals could be made. Read more
CASE STUDY THIRTY FIVE
Internet banking fraud is on the increase…but who is liable?
Mr S ran a small business and had accounts with a number of financial institutions. On 5 December while checking his account balances he noticed $29 500 had been fraudulently debited from one of his accounts over a period of five days. Read more
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