Cross-border disputes
Adrian Dally
Head of Policy
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1
a statutory footing...
we are the statutory ADR scheme
set up by Parliament
Financial Conduct Authority
(the regulator)
Financial
Services &
Markets Act
2000
Financial Ombudsman Service
(adjudicates on unresolved disputes)
Financial Services
Compensation Scheme
(fund of last resort)
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our role…
we are tasked with resolving individual disputes
“quickly and with minimum formality”
 our job is to settle individual complaints:
 fairly
 quickly
 reasonably
 informally
 we cover all retail financial businesses based in the UK…
 …and some based elsewhere in the EEA who have joined
voluntarily
 it does not matter where the complainant lives – anywhere in the
world.
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3
the process…
2
adjudicator
assessment
customer
contact
team
adjudicator
investigation
unable to
resolve
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mediated settlements
formal conclusions
to ombudsman
4
the number of new cases...
300000
280000
260000
240000
220000
200000
180000
160000
140000
120000
100000
80000
60000
40000
20000
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
year ended 31 March
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5
accessibility matters…
some groups of consumers find it harder to complain than others
so we try to make it easier to contact us
The problem – in the past, we had fewer complaints from:
 younger consumers
 consumers from ‘lower’ socio-economic groups
 consumers with disabilities
 consumers whose native language was not English…
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accessibility matters even more…
…because this reflected deeper issues
in society as a whole…
…and we realised from stakeholder research that:
 consumers from ‘lower’ socio-economic groups were
more likely to experience detriment from financial
businesses
 the average UK / EU reading age was 11
 even in 50 years time, we will still have to deal with
many consumers ‘off-line’
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what we did…
we made it easier to contact us
by removing as many barriers as we could
 specially-trained team of front-line advisers to work with
vulnerable consumers
 work with front-line community and advice workers to
reach ‘lower’ socio-economic groups
 three-way telephone conversations
 on-line video and audio content
 text-relay and sign-language
 information in alternative formats – e.g. large print,
CD/DVD, EasyRead
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8
language matters too…
in 2012 we had 1910 complaints from outside the UK
from 104 different countries
in 46 different languages
We handled this by:
 instant over-the-phone interpretation
 translation of correspondence
 website information in 25 languages
Total of 2282 cases handled in languages other than English
or Welsh – 25% in non-European languages
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9
the results so far…
more cases from ‘lower’ socio-economic groups
and from those with a disability
or from non-white backgrounds
Some positive progress, for example:
 cases from unskilled consumers 5%  12%
 cases from skilled / semi-skilled consumers 36%  54%
 cases from professional / managerial consumers 59%  34%
 21% of complainants have a disability (18% in population)
 cases from non-white consumers 8%  12%
…with no difference in outcomes between groups
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cross-border disputes matter…
The internal market in financial services is growing
 4% of EU citizens holding shares, bonds or investment
funds bought them in another Member State,
 3% of EU citizens having a bank account opened it
in another EU country,
 2 % of those with a mortgage, credit card or personal
loan bought their product in another
EU country and
 1% of those having an insurance product bought it in
another Member State.
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so we have FinNet…
…to help consumers find the right ADR body when they
complain about a trader in another member state
 the consumer contacts the nearest (home) ADR body.
 the nearest ADR body provides the consumer with the
information about the ‘competent’ ADR body in the
country of the financial services provider
then
 the home ADR body sends the complaint to the
‘competent’ ADR body (or helps the consumer to do so)
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FinNet coverage…
…is getting better, but there are gaps
Country
Banking
Payments
Insurance
Investments
Austria
FIN-NET
FIN-NET
Belgium
FIN-NET
FIN-NET
Czech Republic
FIN-NET
FIN-NET
Germany
FIN-NET
FIN-NET
FIN-NET
FIN-NET
Denmark
FIN-NET
FIN-NET
FIN-NET
FIN-NET
Estonia
FIN-NET
FIN-NET
FIN-NET
FIN-NET
Greece
FIN-NET
FIN-NET
FIN-NET
FIN-NET
Spain
FIN-NET
FIN-NET
FIN-NET
FIN-NET
Finland
FIN-NET
FIN-NET
FIN-NET
FIN-NET
FIN-NET
FIN-NET
FIN-NET
FIN-NET
FIN-NET
Bulgaria
Cyprus
France
FIN-NET
Hungary
FIN-NET
FIN-NET
FIN-NET
FIN-NET
Ireland
FIN-NET
FIN-NET
FIN-NET
FIN-NET
Italy
FIN-NET
FIN-NET
FIN-NET
FIN-NET
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FinNet coverage (continued…)
Country
Banking
Payments
Insurance
Investments
Lithuania
FIN-NET
FIN-NET
FIN-NET
FIN-NET
Luxembourg
FIN-NET
FIN-NET
FIN-NET
FIN-NET
Malta
FIN-NET
FIN-NET
FIN-NET
FIN-NET
Netherlands
FIN-NET
FIN-NET
FIN-NET
FIN-NET
Poland
FIN-NET
FIN-NET
FIN-NET
FIN-NET
Portugal
FIN-NET
FIN-NET
FIN-NET
FIN-NET
FIN-NET
FIN-NET
FIN-NET
FIN-NET
United Kingdom
FIN-NET
FIN-NET
FIN-NET
FIN-NET
Norway
FIN-NET
FIN-NET
FIN-NET
FIN-NET
Iceland
FIN-NET
FIN-NET
FIN-NET
FIN-NET
Liechtenstein
FIN-NET
FIN-NET
Latvia
Romania
Sweden
Slovenia
Slovakia
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FinNet’s caseload…
…is growing
Cross-border cases by sectors
Year
Total number of cross-border
cases handled by FIN-NET
members
Banking
Insurance
Investments
Other
2007
1 041
492
267
280
2
2008
1 346
673
326
335
12
2009
1 542
884
244
410
4
2010
1 794
1 123
348
302
21
2011
1°854
992
518
315
29
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the challenges ahead…
…there are a number of challenges if ADR is to achieve its
full impact
 achieve fuller coverage
 better accessibility for all consumers – not just on-line
 better visibility and branding
 better links with regulators
 better added value through transparency
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16
Any questions?
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Cross-border disputes