As reported in the recent Annual Report, complaints to the TIO over the 2005 financial year rose by almost a third. It’s worth recalling what was written four years ago when there was a similar spike in complaints when One-Tel collapsed.

The TIO said then that some commentators had argued that the relatively high rate of complaints resolved in favour of consumers by the TIO was evidence of inadequate performance in the area of internal dispute resolution (IDR) by telecommunications providers.

A rise in complaints of almost 20,000 demonstrates that there are lessons still to be learned.

To illustrate the benefits of IDR one need go no further than the banking industry and the TIO’s counterpart the Banking and Financial Services Ombudsman.

In releasing his annual report, the Banking Ombudsman, Colin Neave, said that IDR teams within banks needed to be independent decision makers, should be respected within the organisation, needed to have the power to resolve disputes and, where necessary, be advocates for the customer.

Too often internal dispute resolution processes fall over because customer service staff:

• do not have the power to resolve a complaint in the first instance
• are overruled by business units who are concerned about the costs of resolving complaints in their respective back yards
• are not given respect by other staff as they are seen as the bearers of bad news
• are sometimes the most inexperienced in the organisation.

An example of one bank’s commitment to IDR is the ANZ’s Customer Advocate, among whose principles is the promotion of internal and external understanding of ANZ’s complaints resolution process.

In the 2003 and 2004 financial years, commitment by the banks to IDR paid off in a reduction in complaint numbers to the Banking Ombudsman. Complaints rose this year, but by a modest 4.2 per cent.

The benefits of having a well thought out internal dispute resolution process may seem obvious, but bear repeating.

An organisation that allows its complaints to be resolved externally is not developing a culture that values feedback. Ultimately, the organisation misses out on ways to modify its processes for the benefit of customers.

The Commonwealth Bank, for example, tells its staff to view complaints not as bad news, but as constructive criticism.

Resolving disputes in-house will often strengthen the relationship with the customer. Many customers who resort to alternative dispute resolution schemes such as the TIO subsequently switch providers.

Alternative dispute resolution is expensive. The TIO’s highest level of complaint resolution will cost a provider thousands of dollars.

As the TIO’s primary function is the resolution of complaints, we have a part to play in assisting members strengthen their internal dispute resolution processes.

The TIO can assist individual members and the industry as a whole by identifying common sources of complaint to the TIO, or complaints that should have been dealt with in the first instance by the provider concerned.

In the new year, the TIO will initiate a new approach to resolving complaints with the assistance of a small number of member organisations.

The project will involve extensive consultation to identify means of giving these members access to the TIO’s expertise in complaint resolution. The results of this project will be used to develop a strategy to encourage all members to benefit from the TIO’s complaint handling experience.

John Pinnock
Ombudsman