The Australian Financial Complaints Authority has introduced a “merit assessment” step in its complaints handling process, in a bid to make the process cheaper and faster.
AFCA will now be able to determine at the initial case management stage that a complaint lacks merit if it is clear there is no error or financial loss. In such cases it will exclude the complaint before starting an investigation.
AFCA said merit assessment will be applied in cases where sufficient information about a complaint is available at an early stage and clearly shows there is no error and/or loss.
“Complaints that raise more complex issues, with significant documentation involved, would still require an investigation to reach a view on what has occurred,” the ombudsman said in a statement.
It said the problem of unmeritorious complaints has been exacerbated by some paid representatives employing questionable tactics and refusing to consider reasonable solutions.
It piloted the merit assessment process for three months last year, reporting reductions in costs and resolution times.
AFCA chief operating officer Justin Untersteiner said: “Our pilot was in direct response to feedback from members that the cost of paying for some determinations – the final, formal decision-making stage of our process – can outweigh the value of the initial service or product provided.
“Firms told us this meant they sometimes made a commercial decision to concede the complaint on the basis of cost, regardless of the merits of the case.”
The introduction of merit assessment also forms part of AFCA’s response to a Treasury review of its performance last year.
The review identified some shortcomings in the timeliness of AFCA’s resolution of complaints and made a number of recommendations aimed at giving participants a clearer picture of the progress of complaints, and better management of expectations around timeframes and AFCA’s review processes.