Appendix 1: Quick Checklist for Applicants for Approved Industry-Based Dispute Resolution Schemes

Within this section…

NB: Schemes may wish to separate these requirements into a number of different documents

Objective and Scope

Pg ref	Title	Achievement Standard	FSP Act
	Objectives
	Overall Objective	The scheme rules provide for an appropriate purpose. Suggestion: The scheme purpose includes – · To consider complaints with respect to member FSPs; · To provide advice to members; and · To provide information to potential users of the scheme.	s52(1)(a)
	Consultation	The scheme has undertaken consultation with parties likely to be substantially affected, including industry and consumers.	S52(1)(b)
	Scope
	Clear Scope	The scheme rules are clear on the scope of the scheme and the powers of the decision-maker.	Effectiveness
	Scheme Rules	The scheme rules cover the requirements of s63, and satisfy the benchmark principles.	s52(1)(g) s63
	Coverage of Sector	The scheme states in its rules which types of financial service providers may be members of the scheme. All providers of that type must be eligible for membership. The scheme rules state that a member who has not taken remedial action imposed on them by another approved dispute resolution scheme or the reserve scheme cannot join the scheme.	s52(1)(k) s63(a)
	Complainants	The scheme states in its rules that consumers and businesses that have no more than 19 full-time employees may access the scheme. Suggestion: The scheme may wish to extend access to the scheme to other classes of complainant.	s63(c)
	Free Access	The scheme rules specify that it is free of charge for consumers to lodge a complaint.	s63(c)
	Definition of Complaint	Suggestion: The scheme may wish to adopt a definition of complaint.
	Coverage of Complaints	The scheme states in its rules that complaints about members may be made regarding: · Breaches of contract; · Breaches of statutory obligations; · Breaches of industry codes; · Any other matter. Suggestions: The scheme rules provide that a complainant is not required to frame their complaint within one of these categories in order to access the scheme. The scheme is not required to investigate areas of commercial judgement, but should address complaints about the administration of commercial judgement. The scheme does not have to investigate complaints that are the subject of alternative court action.	s63(d) s63(g) s63(p)
	Amount Claims May be About	The scheme's scope is sufficient to deal with consumer complaints involving monetary amounts up to a specified maximum that is consistent with the nature, extent and value of customer transactions in the relevant industry. The scheme may utilise either a cap or a limit. The cap or limit is specified. Suggestions: The scheme rules consider whether a consumer's claim for interest can be allowed over and above a cap or limit. Consideration is given to indexing the cap or limit, or providing for the cap or limit to be reconsidered by the 5-yearly independent review.	Effectiveness s52(1)(f)
	Unacceptable Actions by Complainants	Suggestion: The scheme rules provide a procedure for dealing with vexatious complainants.	Effectiveness Efficiency
	When complaints can be taken	The scheme rules provide for when complaints can be taken. These rules cover: · Deadlock; · Limitation periods; · Retroactive application. Suggestion: The scheme rules provide that in the first instance a consumer's complaint will need to be taken up with the FSP member who provided the product or service.	s63(e) Accessibility
	Dual Access	Suggestion: The scheme rules allow a member to refer complaints to the scheme in certain instances.

Membership Requirements and Obligations

Title	Achievement Standard	FSP Act
Membership Rules
Joining the Scheme	The scheme rules describe how a financial service provider may become a member of the scheme. The scheme rules provide that membership is not open to an FSP who has not complied with remedial action imposed on it by another approved scheme or the reserve scheme.	s63(b) s63(k)
Termination	The scheme rules provide for how membership is terminated.	s63(b)
Obligation to Comply and Co-operate
Obligation to comply	Suggestion: The scheme rules impose on members an obligation to comply and co-operate with the scheme.
Co-operation with Other Members	Suggestion: The scheme rules impose an obligation for scheme members to co-operate with each other
Information provision	Suggestion: The scheme rules require that members provide to the scheme's staff and the scheme's decision-maker all information relevant to the complaint in a timely fashion.	Effectiveness Fairness
Confidentiality and other prohibited disclosures	Suggestion: The member is not obliged to provide information to the scheme where such a disclosure is prohibited by law. The member may also take reasonable measures to protect information that is confidential and/or subject to privilege, such as making deletions to the provided material.	Fairness
Effective Internal Complaints Handling
Internal dispute resolution	Suggestions: The scheme rules require all members to have a robust internal complaints resolution system. The scheme sets specific standards for the internal systems to achieve, or imposes a common system.	Effectiveness
Staff Training	Suggestion: Members have robust training programmes in place to give front-line staff the competency to deal with complaints within the internal dispute resolution system.	Effectiveness
Top Management	Suggestion: Internal dispute resolution systems have commitment from the top levels of management.	Effectiveness
Promotion of internal systems	Suggestion: The scheme rules require all members to promote their internal dispute resolution systems.	Accessibility
Consumer Accessibility Requirements on Members
Promotion of scheme	The scheme rules require the scheme's members to inform consumers and businesses with less than 19 full time employees about the scheme. Suggestion: The scheme rules have promotion obligations on members to ensure the accessibility of the scheme for consumers.	s63(r) Accessibility
Binding Determinations
Binding on Members	The scheme rules state that a determination of the decision-maker is binding on the scheme member concerned. The resolution is binding on the complainant if the complainant accepts the resolution.	Effectiveness s63(m) s63(n)

Governance Requirements

Governance Board
Oversight Role		Suggestion: The scheme rules require a governance board with responsibility to oversee the operation of the scheme according to the benchmark principles.	Independence
Composition		Suggestion: The governance board has equal numbers of consumer and industry representatives, with an independent chair.	Independence
Consumer Representatives		Suggestion: The scheme rules state how consumer representatives are appointed to the governance board.	Independence
Industry Representatives		Suggestion: The scheme rules require that the representatives of industry interests are: · Persons in whom consumers and consumer organisations can have confidence; · Elected by members, for instance through a members' forum if one exists.	Independence
Independent Chair		Suggestion: The scheme rules require an independent chair.	Independence
Functions		Suggestion: The scheme rules require that the functions of the governance board include: · Appointing the decision-maker; · Agreeing on the budget; · Considering changes to the scheme rules; · Receiving and considering complaints about the operation and performance of the scheme; · Receiving information about, and taking appropriate action in relation to, systemic industry problems referred by the scheme.	Independence
Competency		Suggestion: The scheme directors and senior managers must be competent to manage a dispute resolution scheme.	S52(d)
Members' Forum
Members' Forum		Suggestion: The scheme considers allocating certain governance tasks to a forum comprised of industry members. Appropriate tasks would be deciding how the budget is to be allocated amongst members, and electing industry representatives to the governance board. A members' forum should not have the power to amend the scheme's rules.
Appointing Decision-Maker
Appointment of Decision-Maker		Suggestion: The scheme rules require that the decision-maker is appointed by the governance board and has no relationship with the scheme members that fund or administer the scheme which would give rise to a perceived or actual conflict of interest.	Independence
Qualifications of Decision-Maker		Suggestion: The scheme rules provide for the necessary qualifications for a decision-maker, such as legal or arbitration expertise and relevant attributes and experience.
Other Staff		Suggestion: The scheme rules require that the scheme staff are independent of members and are to be appointed by either the governance board or the decision-maker.	Independence
Handling Complaints about the Scheme
Referred to Governance Board	Suggestion: The scheme rules require that the scheme receives complaints about the operation of the scheme, and refers them to the governance board. This excludes complaints about the content of a determination by a decision-maker, but includes procedural complaints about a determination (also noted above under governance board).		Independence
Governance Board Recommendations	Suggestion: The scheme rules require the scheme to respond in a timely and appropriate manner to any recommendations of the governance board addressing complaints about the operation of the scheme.		Effectiveness

Decision-Making

Decision-Maker
Function	Suggestion: The scheme rules require the scheme to have a decision-making body/person responsible for the determination of all complaints.
Powers	Suggestion: The scheme rules require that the decision-maker has the power to: · Recommend that a complaint should be settled or withdrawn; · Uphold a complaint against a member. Suggestion: If a complaint is upheld, the decision-maker has the power to: · Recommend a member to take certain actions to make amends; · Recommend a member to pay compensation to the complainant.	s63(i)
Independence	Suggestion: The scheme rules require the decision-maker to be independent of the scheme members. Suggestion: The decision-maker is accountable to the governance board rather than the scheme members.	Independence
Fair and Reasonable Determinations	Suggestion: The scheme rules require that the decision-maker makes determinations based on what is fair and reasonable, having regard to good industry practice, relevant industry codes of practice and the law.	Fairness
Written Determinations
Reports	Suggestion: The scheme rules require the scheme to provide written reports of determinations to scheme members and any interested bodies for the purposes of: · Educating scheme members and consumers; · Demonstrating consistency and fairness in decision-making.	Accountability
Sensitive information	Suggestion: The scheme rules provide for certain types of information to be withheld from published determinations, such as confidential, commercially sensitive, legally privileged or personal information.
Remedial Action
Types of Remedial Action	The scheme rules must provide for the types of the remedial action that the scheme can recommend in order to resolve a complaint. Suggestion: The rules outline when each type of remedial action would be appropriate.	s63(i)
Not punitive	Suggestion: The scheme rules do not allow the decision-maker to award punitive or exemplary damages.
Enforcement	The scheme rules state how remedial action may be enforced against members, including members who have left the scheme subsequent to the determination. Suggestion: The scheme rules also provide for how remedial action is to be enforced on a member who ceases to carry on business.	s63(j) Effectiveness

Accessibility

Promoting the Scheme
Publicity	Suggestion: The scheme provides material which is easily accessible and simple to use, explaining: · How to access the scheme; · How the scheme works; · Major areas the scheme deals with; and · Limits on the scheme's powers.	Accessibility
Accessing the Scheme
Rules	The scheme rules are expressed clearly and made available to the public, free of charge, at the scheme's head office (during ordinary office hours) and on the internet.	s64
Processes	Suggestion: The scheme has processes that are simple for complainants to understand and easy to use.	Accessibility
Easy Access	Suggestion: The scheme provides mechanisms for easy access, such as a free phone number, a freepost service and an online submission form.	Accessibility s63(d)
Assisted Access	Suggestion: The scheme has measures in place to help customers with special needs, be they socio-economic, cultural, language, geographical or physical needs, to access the scheme and use it effectively.	Accessibility
Assisted Complaints	Suggestion: The scheme rules do not require a complainant to put a complaint in writing. If a complainant would like, the scheme will record the complaint in writing and send it to the complainant for confirmation.	s63(d)
Free Access	The scheme rules specify that the scheme is free to complainants. Suggestion: This fact is highlighted in all promotional material.	s63(l)
Support Persons	Suggestion: The scheme rules provide support persons to complainants. These support persons should help complainants overcome barriers to access, be they socio-economic, cultural, physical or related to the technical nature of the subject matter. Suggestion: Defined vulnerable complainants are permitted by the rules to authorise a person to represent them in all correspondence involving the dispute.	Accessibility
Other Languages	Suggestions: Schemes provide information about the resolution process in languages other than English which are common amongst its consumers (this could be ascertained by consultation). Schemes provide an interpreter if necessary.	Accessibility
Legal Costs	The scheme rules provide for the member to pay the legal costs of a complainant where the member is the party seeking to be legally represented and the decision-maker agrees to that request.	Accessibility
Experts	If a scheme member chooses to engage an expert to give evidence to the decision-maker, then that expert must also be made available to the complainant.	Accessibility
Informal Approach	Suggestions: The scheme rules are flexible in the way complaints can be made. The scheme rules discourage a legalistic, adversarial approach. The scheme does not require complainants to attend hearings or meetings. The scheme employs other methods to resolve complaints, such as emails, phone calls, online forms.	Accessibility

Procedural Requirements

Title		Achievement Standard	FSP Act
Natural Justice
Natural Justice		The rules will state that parties to a complaint are entitled to be treated according to natural justice. Natural justice requires: · Adequate notice to be given to both parties of important steps and decisions; · The opportunity for both parties to be heard and for their views to be considered before the decision is made.	Fairness s63(f)
Parties Informed		The scheme rules require that both parties are told the reasons for the determination.	Fairness s63(f)
Other Fairness Requirements
Withholding Information		Suggestion: The scheme rules do not allow the decision-maker to compel disclosure of information by the complainant.	Fairness
Exclusions from Scheme		The scheme rules require that complainants are advised of the reasons why their complaint is outside the jurisdiction of the scheme or otherwise excluded.	Fairness
Complaint information		Suggestion: The scheme rules require that confidential or sensitive information provided for the purpose of dispute resolution is kept confidential by the decision-making body and its staff, subject to disclosure required by law.	Fairness
Accountability
Written Decisions		Suggestion: Schemes publish summaries of final decisions, with reasons, subject to any confidentiality requirements. The summaries of decisions should be available to interested parties.	Accountability Accessibility Fairness
Commencement of Legal Proceedings
By the Consumer		The scheme rules provide that the complainant may take alternative court action against the member at any time, including if the complainant rejects the resolution. If the complainant takes alternative court action against the member, the scheme may cease investigating the complaint.	s63(o) s63(p)
By the Scheme Member		Suggestion: The scheme rules provide that after a complaint has been lodged, the scheme member may only lodge legal proceedings in the following circumstances: a. To preserve their legal rights where a limitation period is about to expire, subject to the following conditions: i. while the scheme is dealing with the complaint, the member will not pursue the legal proceedings beyond the minimum necessary to preserve its rights; and ii. if the complaint is resolved, whether by agreement or determination, the member will discontinue any aspect of the legal proceedings that is inconsistent with the agreement or determination; b. in test case situations.
Efficiency – Referrals and Information Sharing
Referring complaints	Suggestion: The scheme rules require that scheme staff have the information, mechanisms and procedures for referring relevant complaints to other, more appropriate, forums.		Efficiency
Information Sharing about complaints	The scheme rules require that scheme staff have the mechanisms and procedures in place to share prescribed information with other approved schemes, the Reserve Scheme and the Registrar.		S67(a) and (b)
Systemic Problems	The scheme rules require that there are mechanisms and procedures in place for referring systemic industry problems that become apparent from complaints to the relevant licensing authority. Schemes should also notify scheme members of such issues.		S67(c) Effectiveness Efficiency
Efficiency - Tracking Complaints
Systems	The scheme rules require the scheme to keep systematic records of all complaints and enquiries, their progress and outcomes.		Efficiency
Time limits	Suggestions: The scheme rules require the scheme to have time limits for the resolution of complaints. The scheme is also required to have a mechanism to ensure that the time limits for dealing with complaints are complied with as far as possible. Suggestion: A complaint should be resolved within 2 months of receipt by the scheme. Rules should be in place regarding the extension of this time frame for more complex complaints, or in extenuating circumstances.		Efficiency
Receipts	Suggestion: The scheme rules require staff to provide complainants with a receipt indicating the acceptance of the complaint within a certain period upon receiving the complaint. The receipt should include information on the process for resolving complaints, including the projected timeframes.

Funding and Budgeting Requirements

Funding Arrangements
Adequacy	The scheme rules ensure that the scheme has adequate funding to enable its operation according to the scheme's purpose and in accordance with the scheme rules.	S52(c)
Funded by Members	The scheme rules require that the scheme is funded by the members.
Transparency	Suggestion: The scheme rules require that the funding arrangements are clear and transparent to stakeholders.	Accountability
Funding Mechanism	Suggestion: The scheme rules state how the funding mechanism is set.
Budgets
Budget Setting	Suggestion: The scheme rules provide for a system of budget setting which ensures actual and perceived independence of the scheme from industry, and allows the effective operation of the scheme.	Independence

Compliance Monitoring and Enforcement

Rules to provide for compliance
Compliance Monitoring	Suggestion: The scheme rules provide mechanisms to monitor member compliance with the scheme.
Compliance Enforcement	Suggestion: The scheme rules state any mechanisms aimed to ensure compliance, such as naming and shaming, reporting to regulatory agencies.	Effectiveness
Overseeing Entity to Report on Compliance
Annual Report	Suggestion: The Annual Report includes information on member compliance.	Accountability
Reports to Licensing Authority	The scheme rules require that if there is a series of material complaints about a particular licensed provider or class of licensed provider, the overseeing entity must report that fact to the relevant licensing authority.	s67

Amending the Scheme Rules (for explanatory purposes)

Amending the Scheme Rules
Notification	Any changes to the scheme rules are to be notified to the Minister of Consumer Affairs. The scheme rules must not contain any provisions inconsistent with this.	s65
Approval by Minister	The Minister may approve a change to the scheme rules if the Minister considers the proposed change complies with the benchmark principles, and the statutory requirements for scheme rules. The scheme rules must not contain any provisions inconsistent with this.	s66(1)(a)
Rejection by Minister	The Minister may refuse to approve the changes if they are not adequate and do not comply with the benchmark principles and the statutory requirements for scheme rules. If the Minister does not approve the change then the change must not be made. The scheme rules must not contain any provisions inconsistent with this.	s66(1)(b)
Deemed approval	If the Minister does not notify the scheme within 45 working days of the notification of the change, the change is treated as having been approved by the Minister. The scheme rules must not contain any provisions inconsistent with this.	S66(3)

Performance Monitoring Requirements

Performance Standards
Standards to be set	Suggestions: The scheme rules include standards against which the performance of the scheme will be measured. The performance standards set are sufficient to allow external parties to readily determine if the scheme is operating according to the benchmark principles.	Efficiency
Annual Reports
Annual Reports	The scheme rules require the scheme to provide the Minister of Consumer Affairs with an annual report within 3 months after the end of the scheme's financial year (this timeframe is required by s68) The Annual Report may contain information such as: · information about how the scheme works · results of the internal review · statistics on caseload, resolved cases, cases rejected on jurisdictional grounds, the amount of time taken to resolve complaints · results of feedback surveys · some examples of typical cases · information on compliance with the benchmark principles · the list of members · information on performance standards · the results of the independent review, if any independent review has been conducted that year · financial statements which sufficiently illustrate how the funding is being utilised · a list of scheme members who committed substantial breaches of their membership obligations · any systemic issues arising from complaints, and how those issues have been dealt with · information about new developments or key areas in which policy or education initiatives are required.	Accountability s68 s69
Annual Report Publicly Available	The scheme must have copies of the Annual Report available to the public at the scheme's head office and on the internet.	s70
Independent Review
Scope of Review	The scheme rules require an independent review of the scheme.	s63(q) Effectiveness
Terms of Reference	Suggestion: The scheme rules require that the terms of reference for any independent review will be determined by the governance board following consultation with the Ministry of Consumer Affairs.	Effectiveness
Reviewer	Suggestion: The scheme rules require the independent reviewer to be appointed by the governance board following consultation with the Ministry of Consumer Affairs.
Frequency of Review	The scheme rules require that an independent review must occur at least once every 5 years after the date of the scheme's approval.	s63(q)
Supply to the Minister	The scheme rules require that the independent review must be supplied to the Minister of Consumer Affairs within 3 months of completion.	s63(q)
Independent Review Publicly available	Suggestion: The scheme makes copies of the Independent Review available to relevant stakeholders. Suggestion: A summary of the independent review is included in the Annual Report for that financial year. The Annual Report is required by s70 to be made available to the public at the scheme's head office and on the internet.	Effectiveness

Exit Requirements

Winding up the scheme
Request to Minister	The Minister of Consumer Affairs must withdraw the approval of the scheme upon the scheme's request.	s56(3)
Date of Effect	The removal of approval takes effect from any future date requested by the scheme.	s56(3)
Transfer of Members	The scheme rules require the scheme to give its members adequate notice to make arrangements to join another approved scheme if the members wish. If no alternative arrangements have been made then members will automatically be transferred to the reserve scheme on the date of effect.