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Dispute Resolution - Internal and External
Dispute Resolution - Internal and External
Updated over a week ago

This section will show why detailed notes are important and how they are connected to dispute resolution.

ASIC's review

In November 2011 ASIC released a report, which stated that after reviewing a number of Broker groups around Australia it was clear Broker files did not contain enough notes on the transaction or opportunity. Detailed notes are an important part of the transaction process and if a dispute arises can be easily accessed to resolve the dispute. In the first instance if a dispute arose you would refer to your licensee's Internal Dispute Resolution (IDR) Policy. If you cannot resolve the dispute in this instance then your client may choose to lodge the dispute with your External Dispute Resolution (EDR) provider (AFCA). Your file notes will be requested as part of this resolution process. If you don't have any to provide to AFCA, the External Dispute Resolution provider may just rule in favour or your client. As best practice guidance we suggest you review your process around the retention of file notes.

What forms a note?

In short detailed notes should be used as a time line for the opportunity, transaction or loan discussions with anyone who plays a part in the transaction.

Detailed notes should contain the following;

  • HOW the consumer/client came to you

  • The notes should also explain WHY you chose a particular product over another

  • The notes should also relate to the PROCESS that you undertook throughout, this means all emails both to and from the clients, telephone conversations or emails from Lender BDM’s or Credit Assessors

  • If the transaction is declined WHY

  • If you move to another lender WHY

  • If the client chooses to not proceed WHY

  • If the client informs you to use or not use a particular lender WHY

  • If the client specifies a fixed or variable rate WHY

Reasons why

Your client may have a concern relating to the transaction which may escalate into a dispute if not resolved. By retaining all notes on your written or verbal conversations you can easily refer to these and perhaps finalise the client concern. However, in some instances, this may not satisfy the client who may escalate their concern to AFCA, the EDR provider. The EDR provider will then request your file notes to try and resolve the client dispute.

If there are no file notes or very few held on the file, then the resolution process may take some time or AFCA may resolve the dispute in favour of the client. I

AFCA may also charge you a fee for managing the dispute.

Working together

We have suggested the above points under 'what forms a note' as industry best practice. It's always better to err on the side of caution and have more notes which reflect the whole conversation for the transaction than minimal or none.

If you are a credit representative of a licensee, you will need to ensure your licensee is fully aware of any concern that a client has raised with you so they can monitor and resolve it prior to any escalation.

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