This section will show why detailed notes are important and how they are connected to dispute resolution.
ASIC's position
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 has the option 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, AFCA may simply rule in favour or the complainant.
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 timeline for the opportunity, transaction or loan discussions with anyone who plays a part in the transaction.
Detailed notes should contain the following:
HOW the 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 records of your written correspondence and verbal conversations you can easily refer to these and perhaps finalise the client concern. However, this may not be enough to satisfy the client who can escalate their concern to AFCA. As part of its normal practice, AFCA will then request your file notes to try and resolve the client dispute.
If there are no notes, or very few held on the file, the resolution process may take some time or AFCA may resolve the dispute in favour of the client.
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.