Types of disputes
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BFSO classifies all cases according to:
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- The product or service obtained by the consumer; and
- The problem with the product or service as reported by the consumer.
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Every case involves at least one product and for each product recorded there is at least one problem. Some cases will involve multiple products and for each product there may be multiple problems. Appendix C is the full list of products and problems used in BFSO classification.
The figures in this section are derived from all cases closed after referral to a member. This excludes cases that were determined to be outside Terms of Reference or were discontinued prior to referral to a member.
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Product categories
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Products are classified into one of six broad categories as shown in the graph below.
During the reporting period there were 4,548 products recorded in respect of the 4,342 cases closed after referral to a member. Appendix C lists the products in each product category.
As in the previous five years, Consumer Finance (37.6 per cent) was the top product category in disputes this year. The other main product categories were Housing Finance (18 per cent), Payment Systems (17.1 per cent), and Deposit Accounts (15.7 per cent).
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Problem categories
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Problems are classified into one of seven broad categories as shown in the graph below.
During the reporting period there were 5,074 problems recorded in respect of the 4,342 cases closed after referral to a member. The graph shows the distribution of problem categories. Appendix C lists the problems in each problem category.
Across all product categories, Transactions and Calculations was the most common problem identified by consumers, representing 24.7 per cent of all problems recorded. This problem category includes disputes about unauthorised transactions, calculation errors and withdrawal and deposit errors.
The second ranked problem category identified by consumers was Commercial Decision. Problems in this category relate to whether a member has made a commercial decision, which it is entitled to make, or whether, in fact, it has acted contrary to the terms of a contract or a duty owed to the consumer. This category accounted for 17.5 per cent of problems identified and includes disputes about the rejection of a credit application, dishonoured transactions, maladministration in granting credit and maladministration in debt recovery, including reporting to a credit reporting agency.
Service Quality made up 17.3 per cent of problems identified. This problem category includes disputes about administrative errors, breaches of privacy and/or confidentiality, delays, failure to respond to correspondence or enquiries, inappropriate requests for information or inappropriate staff attitudes to customers and loss of a document or safe custody item.
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View the Problem categories graph
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The pie charts below indicate the broad financial product categories in descending order according to the number of disputes about the product category. The total number of products recorded was 4,548.
The corresponding tables show the proportion of disputes involving discrete financial product groups within the broad categories.
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View a pdf of the product categories
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Linking problems with product categories
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The attached pdf lists each of the broad product categories and the three main products identified in each category. For each of the products, the two most frequently described problems are listed. The percentage figure represents the number of times the particular problem was recorded for that particular product. For example, in the case of credit card disputes, 16.2 per cent of all problems relating to credit cards were about unauthorised transactions and 9.7 per cent were about maladministration in granting the credit. The low percentage for the two top problems (25.9 per cent) indicates that the problems experienced with credit cards were across the whole range of problems classified by BFSO. By contrast, the two main problems with ATMs, cash dispensing problems (48.8 per cent) and unauthorised transactions (38.5 per cent), together represented 87.3 per cent of all problems identified within that product category.
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Products and problems in disputes resolved at an early stage and disputes resolved after investigation
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This graphic shows the relative representation of different product categories in disputes closed at an early stage compared to cases closed after an investigation.
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Consumer finance
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This year, the Consumer Finance category was the predominant product category in both the early resolution cases (38.2 per cent) and in investigation cases (31.7 per cent). In early resolution cases, the main problem identified within this category was unauthorised transactions. In cases closed after investigation however, the main problem identified by consumers was maladministration in lending. Disputes about maladministration in lending are about the provision of credit when there was no capacity to repay the credit. These disputes raise more complex banking and legal issues and require detailed investigation to reach resolution.
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Housing finance
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Housing Finance and Payment Systems were the equal second ranked product categories in cases resolved at an early stage (17.4 per cent). The main problems identified by consumers in housing finance disputes that were resolved at an early stage were delays in either loan approvals or settlements. In such cases the financial loss flowing from delays is quantifiable and the matters are relatively easy to resolve. The main problem identified by consumers in housing finance disputes that were investigated was that of an alleged breach of the finance contract.
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Payment systems
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Payment Systems was the other second ranked product category in cases resolved at an early stage (17.4 per cent) but the fourth ranked product category in cases closed after investigation. The main problem identified in both early resolution cases and investigation cases was that of unauthorised transactions. This indicates the varying complexity of disputes and claims arising from the unauthorised use of payments systems to access the accounts of the disputants.
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