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The official publication of the Society of Consumer Affairs Professionals Australia

June 2010

Allan Fels Consumer and competition champion

page 8 20th Anniversary Symposium preview

page 11 Banking sector focuses on consumers

page 14 Research: Saying no

20th AnniversAry

socaP australia international symposium 24–26 august 2010 Park hyatt melbourne

consumer affairs: The game has changed 0 1991–201






0 1990–201


Jeff hagen director, consumer services, general mills usa

Dr Claire noone executive director, consumer affairs Victoria

nick stace ceo, choice

yvonne Adele ideas culture, thought leader and consultant

Program details and registrations: or call 61 3 8687 9060 Early Bird Booking deadline: 30 June 2010

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SOCAP Australia Executive President: Andrew Taylor, CaseWork Vice-President: Jane Pires, Suncorp Vice-President: David Schomburgk, Dept. for Families & Communities (SA) Treasurer: Charlie Trkulja, National Australia Bank Public Officer & Company Secretary: Ralph Simpfendorfer, TMI Australia

Board Members Andrew Gavrielatos, NSW Fair Trading


President’s message: Andrew Taylor

Executive officer’s message: Amanda Blesing




Profile: Professor Allan Fels AO

Marilyn Grant, Johnson & Johnson

Symposium preview

Peter Gillson, SFI International


Brendan French, Commonwealth Bank

9 T rading on customer satisfaction: the two-way street to better business

Leigh Thomas, Listening Post

Consumer Affairs: the game has changed 9

Sally Trevena, FaHCSIA Glen Wells, Travel Compensation Fund

Patron Professor Allan Fels AO

SOCAP Australia Secretariat Executive Officer: Amanda Blesing T: 03 8687 9061 E: Projects and Events Coordinator: Eliza Smith T: 03 8687 9062 E: SOCAP Australia Suite 205, 757 Bourke St Docklands VIC 3008 T: 03 8687 9060 F: 03 8687 9063

10 A  CCC – Australia’s consumer laws enhanced to meet the needs of modern markets: Peter Kell

Financial Services 11 C  ustomers first: rhetoric or reality?: Elizabeth Kelleher


Research 14 Saying no: Freya Purnell 19 SOCAP events in Canberra and Brisbane

 ook review – Think Less, Be More: Mental B Detox for Everyone: Dr Christine Maingard

Consumer Directions is produced by FlapJack Custom Publishing on behalf of SOCAP Australia. Editor: Freya Purnell T: 02 9929 5465 M: 0412 602 579 E: Designer: Justin Knights Disclaimer: Views and opinions reported in Consumer Directions are not necessarily those of SOCAP Australia. Whilst all care is taken for accuracy, no responsibility is taken by SOCAP Australia. Consumer Directions is printed on recycled paper. ©Copyright 2010 SOCAP Australia

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SOCAP AUSTRALIA WORKING PARTIES 2009/2010 Communication Working Party Glen Wells, Travel Compensation Fund (convenor), Sally Trevena, FaHCSIA, Andrew Gavrielatos, NSW Fair Trading, Karen Andrews, Nestle (non-director), Freya Purnell, Editor, Consumer Directions Events & Education Working Party Jane Pires, Suncorp, Marilyn Grant, Johnson & Johnson (convenor), Leigh Thomas, Listening Post, Peter Gillson, SFI International 20th Anniversary SOCAP Symposium Working Party Brendan French, Commonwealth Bank, Marilyn Grant, Johnson & Johnson, Lindy Kerr, Australian Taxation Office (non-director), Juliette Mansted, AAMI (non-director), Charlie Trkulja, NAB, Jane Pires, Suncorp (convenor), Bill Dee (non-director), Andrew Gavrielatos, NSW Fair Trading Thought Leadership Working Party Sally Trevena, FaHCSIA (convenor), Ralph Simpfendorfer, TMI, Andrew Taylor, CaseWork, Brendan French, Commonwealth Bank, Leigh Thomas, Listening Post, Rhonda Day, ANZ Note: All working parties also include a SOCAP staff member.


The theme for SOCAP Australia’s 20th Anniversary Symposium is ‘The Game Has Changed’. It’s got me wondering. What has really changed in the last 20 years? We know there’s been a lot of talk about social media, about changes in the legislative landscape, about changes in consumer expectations. But in some ways, when I think about how things have changed since I started in this industry, it’s remarkable how much is actually pretty much the same. Consumer affairs managers are still chasing the same objectives: service recovery, championing the voice of the customer, complying with regulation, looking for efficiencies. And for many, the service model’s still the same. But there is something very different coming, and it’s one of those sorts of changes which can happen without you really knowing at the time. It’s driven by generational change. For the boomers, generational change meant breaking social barriers. We Gen Xers just had to focus on making sense of it all. But for the following generation, Gen Y, the change is driven by the availability and use of information technology. The obvious manifestations: Facebook, messaging, and video chat have revolutionised interpersonal communications for this generation. But I believe this change in habits is rapidly resetting people’s expectations of the way they deal with organisations. For this generation, there’s Old Service, and there’s New Service. Old Service is conducting transactions via call centres, New Service is self-service. Old Service is formal and rigid, New Service is dealing with smart people who are on your wavelength. Old Service is recorded announcements. New

Service is live chat. New Service will be ordering a new car (picking all the options as you go) via a website, and tracking its progress as it’s manufactured, shipped and delivered to your door. The technologies for New Service have been around for a while, but the shift is being driven by the attitudes and expectations of the next generation of customers. Complaints handling in New Service means easy access to processes which are direct, transparent, proactive, and most importantly, instant. New Service means getting on the front foot and being open about things that have gone wrong. As a customer, you will have already experienced New Service. Many of the organisations are small businesses, and a few are large. But you’re also experiencing Old Service every day. For a significant number of large organisations, the game hasn’t yet changed, and perhaps may never change. Monolithic organisations with a long history and complex infrastructure have great difficulty in adapting to New Service. And in this new world of brand-switching and instant communication, we will undoubtedly see the slow decline of those large organisations which fail to adapt to the changing expectations of the new generation. So, for me, the real game-changer is generational change – in no time at all those 21-year-olds will be the grown-up consumers with all the purchasing power, and they are not going to have any tolerance for Old Service. As a consumer affairs professional, it’s got me thinking. Hopefully we’ll see you at the Symposium and we can talk about how the game has changed.


Wow, what a year! As I’ve now been in the role here at SOCAP Australia for just over 12 months, I have been reflecting on what we have achieved in that time. And let me reiterate – wow, what a year! Since April 2009, we have created our online bookstore, launched a pilot for online webinar training, refreshed and updated Consumer Directions and are in the process of introducing a new awards category as well as upgrading our email newsletter to suit our members and subscribers better. As you can see the SOCAP Australia Board, working parties and subcommittees have been extremely busy in their endeavours to improve the quantity and quality of member services. Thanks so much to all involved and well done. More than 600 people have attended training, educational and networking events with SOCAP Australia since June last year, proving beyond all doubt that SOCAP members and subscribers were crying out for relevant and appropriate activities at which to learn about how other professionals face the same challenges, learn about industry best practice, or network with colleagues doing just what you do. This is a phenomenal result. Thanks also for your excellent feedback and comments at the end of each 4 | June 2010 | Consumer Directions

event by way of our online surveys. This assists us to develop better targeted and higher quality activities to suit the various membership segments. Keep the feedback coming as we can’t do this without you. Moving forward, we are currently planning our 20th Anniversary Symposium and are aiming to make this our biggest and best event this year. We are delighted to have Jeff Hagen, director, consumer services, General Mills USA, visiting us and contributing to the program both as a speaker and participant. We are also delighted to have Dr Claire Noone, Consumer Affairs Victoria; Jules Scarlett, director – customer service, Telstra, and Nick Stace, CEO, Choice all contributing as speakers this year. Features in the 2010 program include a new Social Media Boot Camp and a Product Recall Simulation activity, as part of our workshop program on Tuesday 24 August. If you haven’t seen the program as yet, please visit to see updates for the exciting line-up of activities and speakers. To my mind, if you work in consumer affairs, complaints handling or in a service recovery environment, then the Symposium is a mustattend event this year. See you in Melbourne in August!


New Telecommunications Industry Ombudsman appointed Simon Cohen has been appointed as the new Telecommunications Industry Ombudsman (TIO) following Deirdre O’Donnell’s decision to step down to pursue doctoral studies earlier this year. Cohen is currently Victoria’s Public Transport Ombudsman and has more than 15 years experience in complaints investigation and resolution, including roles as Assistant Police Ombudsman and counsel to the NSW Ombudsman. He has also worked at the Commonwealth Administrative Appeals Tribunal and the NSW Health Care Complaints Commission. John Rohan, TIO Board chair, said the TIO had conducted an extensive national search to find a suitable successor to O’Donnell. “Simon has extensive experience in complaints handling across various public services,” said Rohan. “He has the skills to take the TIO forward and make a valuable contribution to the telecommunications industry.” In the meantime, Acting Ombudsman Simon Cleary has moved to widen the monetary limits on the TIO’s decisions in relation to complaints about phone and internet services. Previously only able to make legally binding determinations in disputes involving sums of up $10,000, the TIO will now be able to rule on cases involving sums of up to $30,000. It will also be able to make recommendations in disputes involving up to $85,000, which represents a significant increase on the previous limit of $50,000. Cleary said the limits had not been altered since the inception of the TIO in 1993 and were necessary in light of the increase in the number of cases involving large sums of money. “There is a general community expectation that the TIO can help consumers resolve disputes within our jurisdiction by virtue of the nature of the complaint,” he said. “Consumers would not understand why two complaints about the same issue – one involving $8000 and the other $12,000 – were not both able to receive the same level of assistance from the TIO,” said Cleary.

Financial Ombudsman Service welcomes announcement of statutory compensation scheme The Financial Ombudsman Service (FOS) has welcomed the Federal Government’s announcement that Richard St John will examine a statutory compensation scheme. Alison Maynard, Ombudsman for Investments, Life Insurance and Superannuation, said recent corporate collapses have highlighted a significant gap in consumer protection mechanisms afforded by financial services regulation. “The Government’s decision to support the Ripoll Inquiry’s recommendation that it should investigate a last resort compensation fund is good news for consumers,” she said. “We support an industry-based, industry-funded scheme that would offer ‘last resort’ compensation to retail clients of Australian Financial Services Licensees.”

US consumers expect poor customer service Forrester Research has released a new study which suggests that US consumers expect poor customer service. The research, which was based on a survey of more than 4200 consumers, looked at their expectations for getting an issue resolved in a range of service areas including apparel, banking, auto insurance, credit cards, wireless phone plans, internet, computers and health insurance policy. According to the report, apparel was the only area where more than 50 per cent of customers expected to have a complaint resolved. Computers and health insurance providers fared the worst, with only 30 per cent of those surveyed expecting good customer service in these areas. The report also found that consumers expected to receive the best service from retailers, banks and hotels.

New SOCAP Australia members: March-May 2010 Sharon Projekt


Darren McClelland Australian Communications & Media Authority Lesley Chikitch

Australian Health Management

Lenette Gear

Australian Unity

Claire Munro


Jasmine Hessell


Aridaman Singh Chabbra Department of Immigration & Citizenship John Hall

Department of Veterans’ Affairs

Narelle Vance

Department of Veterans’ Affairs

Tim Hollingsworth

Department of Veterans’ Affairs

Robyn McCutchan

Financial Ombudsman Service

Debbie Higham


Louise Hunter

George Weston Foods Ltd

Pauline Magee

Moreland City Council

Michaela Smith


Mark Peno

nib health funds

Karen Moffitt

nib health funds

Melinda Sorensen

nib health funds

Steve Griffin

NSW Fair Trading

Anthony Kolmus Office of the Disability Services Commissioner Ian Pickersgill Parliamentary Service New Zealand Gayle Williams

Police & Nurses Credit Society

Lisa Sheehan

Police & Nurses Credit Society

Jim Robertson Private Health Insurance Ombudsman David Brockman Telecommunications Industry Ombudsman Simon McKenzie Telecommunications Industry Ombudsman Kate Eadie Telecommunications Industry Ombudsman Dominic White Transport Accident Commission Sue Connolly


Barbara Collins


Jean Bailey Victoria WorkCover Authority Andrew Ronfeldt



Talking consumer affairs with Professor Allan Fels Probably best-known as chair of the Australian Competition and Consumer Commission (ACCC) from its inception in 1995 to 2003, Professor Allan Fels AO has also been the patron of SOCAP Australia throughout the life of the organisation. Now serving as foundation dean of the Australian and New Zealand School of Government, he spoke with Freya Purnell about how the consumer landscape is changing, areas to watch going forward, and his involvement with SOCAP Australia. FP: Can you tell me about the work you’re doing now? AF: I’m working in the Australian and New Zealand School of Government, established by the Australian and New Zealand state and territory governments and 15 universities to provide management development and education for current and future top public service leaders. One of my themes here is that the citizen and the client – which can be different from the citizen – need to be at the forefront of [government’s] concerns. I’m also continuing to do some work, especially internationally, in the field of competition and consumer protection. In the last year, I’ve been to China, India, Saudi Arabia, and eastern Europe. FP: What were some of the highlights of your time as chairman of the ACCC? AF: I changed the orientation of the ACCC to put the consumer interest first. An important matter was to step up the law enforcement role of the ACCC through a much more proactive approach to the enforcement of competition and consumer law, to register the ACCC on the consciousness of business and consumers, and I think that was achieved. I’m particularly happy that, starting in the early ‘90s, the ACCC in my time greatly activated the then-somewhat dormant provisions of the consumer protection part of the Trade Practices Act – not only through cases but through encouraging compliance and emphasising and publicising the benefits of businesses putting consumers first. FP: How did you become involved with SOCAP Australia as patron? AF: I was patron from the start, and the ACCC had a significant role in the establishment of SOCAP Australia. Our hope then was that SOCAP wouldn’t just be about enforcement and compliance, but that it would be something far broader and it would attract businesses big and small who were interested in giving the highest priority to consumer matters, and who would see the development of very proactive approaches to consumers as an important weapon in their own commercial interests. I’m very pleased that SOCAP Australia has gone down that broad path quite successfully. FP: Why is the area of consumer affairs important? AF: Everyone’s a consumer, so everyone has a legitimate interest. Nothing is more important for business than to meet consumer demand. There is also a strong link between competition and consumer protection. It’s all very well 6 | June 2010 | Consumer Directions

encouraging competition on the supply side, encouraging the maximum number of competitors, but that only works if consumers are well-informed. That naturally highlights the critical role of the consumer protection provisions of the Trade Practices Act in complementing the competition work. FP: How do you think the consumer landscape has changed in the last decade? AF: The consumer has become more demanding. The economy is also more competitive and that means the consumer has to get greater attention to win their custom. At the same time that consumers have become more demanding, products have become more complex. We therefore have a very big challenge in coping with the more complex product offerings while keeping matters simple enough for consumers to be able to make intelligent choices. There is also more shopping on the internet, and that poses special challenges, and product offerings are more global, with consumers purchasing more from overseas. I think that businesses have generally become progressively more consumer sensitive over time, and larger, wellestablished businesses are more anxious than ever to avoid having difficulties under the consumer protection laws. There are always new players who may be a bit careless initially about complying with the consumer protection law, but the established players are more and more anxious to ensure that they have no problems. FP: How does the Australian consumer landscape compare to that overseas? AF: First, Australia explicitly links competition and consumer protection. Many countries don’t – about half the OECD does and about half the OECD doesn’t. At the level of consumer protection law, Australia has tended to be a leading player around the world in terms of innovation and progressiveness. But interestingly, these laws are spreading globally. There are over 100 countries with competition law, and nearly all of them have some form of consumer protection and fair trading law. For example, I recently visited Saudi Arabia and helped them introduce a consumer protection law. In the great countries of the future, China and India, they are starting to deal with the issues we dealt with 20 years ago. They’ve still got a long way to go; every country has its complications. We continue to have federal/state complications but we are working towards a national law.

FP: Looking specifically at the public sector, what is your view on how the public sector is interacting with citizens and consumers? AF: This is the big area for the future of consumer policy. Areas like health, education and the provision of public services raise huge consumer issues and we have barely started down this track. All these sectors need a consumer policy revolution – they are years behind the areas currently supplied by the public sector. Governments are only slowly recognising the need to be sensitive to the wishes of consumers and clients. They’re also starting to see that the needs of every individual differ, so there needs to be more individuation of treatment. In schools, there needs to be more recognition that each student is different. In the health sector, again the needs of each person require individual consideration. I also believe that there’s a slow movement to increasing consumer choice. For example, in some states in Australia now parents are getting a choice of the state school they send their child to. In that and other respects, including with the MySchool initiative, consumers are getting more choice and that trend will intensify. Slowly governments are moving the public sector market to a direction where there’s more competition. To engineer more competition requires a quite detailed consideration of supply factors. For example, if there is to be competition in education and health, what are the entry barriers and other drivers of competition? And consideration needs to be given to the demand side to make consumer choice more meaningful and effective, to give consumers enough information so that they can choose wisely. The MySchool initiative is a sign of things to come. I hope there will be a MyHospitals initiative before too long. FP: Why do you think there has been a lack of recognition of the role of consumers by public sector organisations? AF: They are very much supply-side driven. They do not have market pressures in the way the private sector does. They are not going to lose their customers. The private sector will lose its customers if it does not look after them well. FP: What is changing to necessitate a different perspective? AF: Technology, globalisation and the complexity of products. Business and governments need to adjust to that and try to make their offers intelligible to customers so that meaningful choices can be made. I do think that one of the important issues that’s emerging is that of disadvantaged and vulnerable consumers. To a degree, middle class consumers can protect their own interests quite well. But there’s quite a large part of the population which is less able to do that – people who have low IQs, who are from parts of the indigenous population, who have mental health problems, language problems and age problems and so on – who are disadvantaged and vulnerable consumers. This poses a social responsibility question for business. It may not be very profitable for business to give emphasis to looking after the interests of low income people. It’s more profitable to pursue sophisticated offers to better-off consumers. But as part of their social responsibility, there’s an

obligation on business to look after low income people and I think that’s a growing expectation by the public. That is one of the likely challenges for the future and it’s also an important issue for law enforcement bodies in consumer protection – once again because the need is greatest in that area. FP: What other improvements in the consumer and competition landscape do we need to work towards in the future? AF: A theme which has always been emphasised at SOCAP, and can never be overemphasised, is the need for continuous improvement. As soon as an improvement has been made, one becomes aware of the need for there to be further efforts to improve the offering to consumers. It’s the better treatment of consumers, the better provision of offerings to them, that does create great opportunities for business to earn profit and to get more customers. The world of consumers is changing every day, particularly with new technology but also with the steady growth in the economy, demand is constantly increasing and changing its structure. Successful businesses need to be dynamic and responsive and continually seeking ways to improve their consumer offering. Business organisations can also learn much from complaints. When SOCAP Australia was established, we rather hoped that it would go much beyond looking at law enforcement. Of course there are many complaints that business receive that have no issues about compliance with the law, but where those businesses could learn from those complaints and do things better. This idea of using information from complaints to help improve the offering of a business has been widely accepted among SOCAP members and remains a very important tool of progress. It’s also useful to keep an eye on the areas where the ACCC receives the most complaints. The two areas that seem to stand out over time are in areas driven by new technology, such as telecommunications and IT, where the challenge is to make consumers understand readily the offers that are being made and not to fool them advertently or inadvertently with complex offers that can’t be understood. Another interesting area is environmental marketing because more and more are claiming pro-green attributes of products, and it’s very important such claims are valid and not simply ‘greenwash’. cd

20th AnniversAry Symposium preview

socaP australia international symposium 24–26 august 2010 Park hyatt melbourne

consumer affairs: The game has changed The 20th Anniversary SOCAP Australia International Symposium promises to be an event to remember. We look at some of this year’s highlights.


International insights

0 1991–201




One of this year’s keynote speakers is international guest, Jeff Hagen, director, consumer services with General Mills in the US, a leading global manufacturer and marketer of consumer food products with annual net sales of $14.5 billion and more than 100 US consumer brands. Hagen also serves as vice-chairman of the Board of Directors for SOCAP International. At the Symposium, Hagen will be Jeff Hagen Amanda McKenzie Yvonne Adele speaking on ‘Delivering the voice of the customer’, being unable to create change and find new ways to tackle including analysing and reporting on customer problems. intelligence, and ensuring that the consumer is heard at the With climate change one of the big challenges ahead for highest level within their organisation. government, business and individuals, Amanda McKenzie, cofounder of the Australian Youth Climate Coalition, will provide A view of the future Futurist Neer Korn, a founder and director of social and market Symposium attendees with a greater understanding of youth attitudes to climate change. The Coalition now boasts over research company Heartbeat Trends, will provide an up50,000 members, and McKenzie is actively involved in taking to-the-minute view of social trends and consumer insights, the views of young people on climate change to government focusing on the shifting of power to the consumer and the Jeff hagen Dr Claire noone nick stace yvonne and business, representing Australian youth inAdele discussions decline in consumer expectation. director, consumer executive director, ceo, choice ideas culture, thought with the Prime Minister, Federal Ministers, Premiers and State “Consumer nous continues to sharpen along with Government representatives, and business and industry services, general consumer affairs leader and consultant their know-how and ability to deconstruct marketing and representatives from across the world. advertising spin. More than anything, they resent having mills usa Victoria the wool pulled over their eyes. Increasingly the onus is on Hands-on professional development corporations to prove themselves rather than talk about For those who prefer a more experiential spin on their learning, what they may be doing. Consumers will continue relying on the Symposium workshop program has plenty to offer. Steve each other through word-of-mouth and word-of-mouse for Hather from RQA Asia Pacific will walk participants through information and corporations must adapt to welcome and a product recall simulation, designed to explore key success harness this. This is particularly so the younger the audience,” factors and help you better prepare your organisation to Korn says. ensure your next product recall incident does not escalate to a Customer service is also suffering from a serious image Program details and registrations: full-scale crisis. problem in the minds of consumers and addressing this If you’re still getting to grips with the ins and outs of social represents a significant challenge for companies – as well as media, the Social Media Boot Camp might be for you. an opportunity. or call 61 3 8687 9060 Participants will be taken on an online journey with a real-time “Consumer expectations are at an all-time low. Trust look at what customers are saying about your company, and continues to diminish and nothing can be taken at face what you can do about it. 30 June 2010 value. The public anticipate the customer service experience Early Bird Booking deadline: Attendees looking to safeguard the future of their to be unsatisfying. This presents great opportunities for organisations to be able to stand out from the rest by providing department will gain value from a workshop on the business of complaints handling, including how you can turn your positive experiences. Outstanding organisations are few and far between and a good experience will be raved about far and department from a cost centre into a profit centre in the eyes of management, and how to cut costs in complaint handling wide,” he says. and improve your customer satisfaction rating. One of Australia’s foremost thought leaders, Yvonne Adele, symposium major sponsor With many more exciting sessions in store, visit www. will also explain why we’re now in what she calls the Ideas to download the program and register for the Age, where business success in the 21st century means 20th Anniversary SOCAP Australia International Symposium tapping a constant stream of fresh thinking, then acting – Early Bird rates are available for registrations booked and swiftly and decisively. She will help delegates to challenge paid before 30 June 2010. cd the sometimes deep-seated and negative perceptions about


0 1990–201


SOCAP speaker ad final.indd 1

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20/5/10 12:12:08 PM

Symposium preview

Trading on customer satisfaction: the two-way street to better business By Dr Claire Noone Businesses miss thousands of opportunities a year to improve their customer service – just ask the consumer agency that regulates your industry. Consumer Affairs Victoria finalised nearly 12,000 disputes between consumers and traders last year. We only step in when the customer has tried and failed to resolve the issue, so each dispute represents a lost business opportunity for the trader. Added to this are the many lost opportunities when a consumer does not contact us. Our role provides us with a unique perspective on these lost opportunities for business.

Consumer Affairs Victoria at work At Consumer Affairs Victoria, we use conciliation as an avenue for trader education. We identify systemic issues and work with individual traders and industries to assist in addressing them. We have recently increased focus on dispute reduction as an element of our dispute resolution role.

A different perspective We repeatedly observe that a lack of knowledge about rights and responsibilities from both traders and consumers leads to complaints. Complaints are expensive for both parties involved, and we all pay through the impact on our economy. Complaints also undermine consumers’ confidence in their purchasing decisions. When dealing with disputes, Consumer Affairs Victoria staff often deal with a single contact point within the business involved – usually a customer complaints officer. We notice that when senior managers do not engage with intelligence on complaints handling, the business will fail to reduce complaints over time. We also see businesses failing to invest adequately in their complaints handling systems, compared, for example, to their investment in research and development. In such cases, the business is not changing the way it handles consumer issues, or adequately addressing its customers’ concerns. It also means, from our perspective, that the business is not meeting its obligations. We expect businesses to understand and meet their legal requirements. We also expect them to engage with customers about consumer issues, such as product safety and refund rights – and to engage with us on compliance matters. Consumer Affairs Victoria adopts an integrated compliance approach encompassing legislative and policy review, information and education, compliance self-help resources, dispute resolution, stakeholder engagement, monitoring and inspection programs and strategic enforcement. Similarly, businesses should integrate complaints handling and compliance into their day-to-day business and their objectives as an organisation. A complaints handling system, in line with the Australian Standard for complaints handling

(ISO 10002:2004), makes good business sense for any organisation.

Establish relationships with regulators At the heart of customer service is managing relationships. With this in mind, managers should be keenly aware of any interactions their business is having with regulatory agencies. Regulators are key stakeholders in your business – and can help you improve it. To maintain a good relationship with regulatory agencies: • Make sure that all people in the business understand the relationship between work, processes, laws and regulations. This will require appropriate staff training. • Work to integrate compliance and dispute reduction measures into existing processes. • Align your engagement with the regulator with your business planning – particularly its performance measures. • Ensure there are clear reporting lines to senior management on complaints handling and compliance activity. • Take customer feedback and complaints seriously. Use this valuable source of information – analyse complaints data and change your practices where appropriate. As with all relationships, this is a two-way street. The regulator needs to ensure there are effective laws, clear statements of policy, consistent and proportionate enforcement, and integrated strategies that target issues rather than symptoms. cd Dr Claire Noone, executive director of Consumer Affairs Victoria, will speak further on the topic of ‘Education and Information – the key to success’ at the 20th Anniversary SOCAP Australia International Symposium.


Australia’s consumer laws enhanced to meet the needs of modern markets Australia’s consumer law framework is currently undergoing an ambitious reform program. The reforms represent the most significant changes to consumer protection regulation since the introduction of the Trade Practices Act in 1974. The reform program aims to promote consumer confidence in modern markets by making markets fairer and more competitive. The reforms also aim to create a coherent national regulatory structure, in which the various federal, state and territory consumer laws are unified under a consistent regime – the Australian Consumer Law (ACL). The ACCC is working closely with state and territory fair trading agencies to deliver greater consistency and certainty to consumers and businesses across Australia. The ACL will soon apply across Australia and incorporate best practice provisions from state and territory laws. A major component of the reforms is the enhancing of powers available to regulatory agencies. These will allow the ACCC to provide better redress for consumers.

New powers for the ACCC A key feature of the new law is greater penalties for companies and individuals involved in serious cases of consumer misconduct. Those that breach the law may face civil financial penalties and disqualification from company management. This will assist the ACCC to more effectively promote compliance with the law. The ACCC will be able to require businesses to substantiate claims to more readily identify whether such claims are true or not. These substantiation notices are most likely to be used in cases where consumers, and regulators, cannot readily test the claims being made by suppliers. Examples may include verifying claims about the benefits of health products and the validity of environmental claims such as ‘carbon neutral’. Where the ACCC has reasonable grounds, it may now issue infringement notices for a variety of business conduct suspected of breaching the consumer law. This power provides the ACCC with the ability to more efficiently deal with smaller matters that warrant an enforcement response. The ACCC will also be able to seek redress such as refunds on behalf of consumers who are not parties to ACCC legal proceedings. This will significantly improve our ability to take action on behalf of multiple consumers in cases of widereaching market misconduct.

Unfair contract terms Unfair contract terms (UCT) in standard form businessto-consumer contracts entered into from 1 July will be unenforceable as part of the reforms. This reform recognises the increasing prevalence of such standard form contracts in 10 | June 2010 | Consumer Directions

the lives of consumers, especially with the growing purchase of services in modern markets. Under UCT law, the courts can declare a term ‘unfair,’ which means that it is void. While the unfair term is void, the contract will continue to bind the parties to the extent that it can operate without that term. The UCT law will apply to contracts for the supply of goods or services, or the sale or grant of an interest in land, to an individual who “acquires it wholly or predominantly for personal, domestic or household use or consumption”. There are three elements to the test of unfairness that must be met before a term can be found to be unfair. These are: • Whether the term would cause a significant imbalance in the rights and obligations of the parties to the contract; • Whether the term is reasonably necessary to protect the legitimate interests of the party it benefits; and, • Whether the term would cause financial or other detriment if it was applied or relied upon. The court will also consider the term in the context of the contract as a whole. The ACCC, the Australian Securities and Investments Commission (ASIC) and state and territory consumer protection agencies have jointly produced A Guide to the Unfair Contract Terms Law, which provides more detailed information on this new law. This will be available from 1 June.

Further reforms A second tranche of reforms is currently before Parliament. These include: • Best practice provisions from state and territory fair trading laws; • Legislative changes to improve product safety regulation, as part of the broader set of policy reforms to improve Australia’s product safety regime; and, • A new consumer guarantees regime to replace the existing law on warranties and conditions. It is expected that the totality of the Australian Consumer Law reforms will be in place by the start of 2011. The ACCC will work closely with business and consumers about informing them about their rights and responsibilities under the new consumer law framework. For further information about the Australian Consumer Law and Unfair Contract Terms, visit or call the ACCC’s InfoCentre on 1300 302 502. cd Peter Kell is the deputy chairman of the Australian Competition and Consumer Commission. Peter will be speaking at the 20th Anniversary SOCAP Australia International Symposium in Melbourne.

Financial services

Customers first: rhetoric or reality? Across the board, the banking and financial services sector has honed its focus on customer experience, complaints handling and dispute resolution. But are customers satisfied, or is there still more work to do? Elizabeth Kelleher reports. At the height of the economic downturn in Australia, complaints to the Financial Ombudsman Service (FOS) increased by approximately 33 per cent. Some consumers questioned investment advice, penalty fees and the lack of support provided in instances of financial hardship, while others complained about deficiencies in customer service and internal dispute resolution. Rhonda Day, customer advocate, ANZ, says that while the increase in complaints indicated a rise in customers experiencing financial hardship, it also reflected a shift in consumer expectations. “The Global Financial Crisis (GFC) actually brought people’s attention to the importance of financial stability and the importance of understanding their finances, so there wasn’t a bank or financial institution that didn’t have an increase in complaints,” says Day. “But what I’ve also noticed is that customers have got a really strong awareness of their rights and they’re really persistent in pursuing outcomes.” Brendan French, general manager, CBA Group Customer Relations, says Australians are also increasingly aware of the power that comes with being a consumer in the era of social networking and media. “Information has a certain degree of power now,” says French. “Rather than have a one-to-one relationship with their financial services provider, customers can have a oneto-many relationship and that changes the way in which the relationship operates. As a result, the industry is now seeing a lot more war stories, as they are sometimes called, where a customer with a particular dissatisfaction will go and tell many other customers.” This heightens the importance of the customer experience. Mark Melvin, general manager, NAB Retail Southern Region, believes that to ensure long-term profitability, banks and other financial service providers must now refocus their energies on improving levels of customer satisfaction. “In a customer-focused industry and organisation like ours, the benchmark gets raised. Customers are right to do that and we have to rise to meet that challenge,” says Melvin.

Increased emphasis on timely dispute resolution For consumer affairs professionals working in the banking and financial services sector, the past 12 months have been marked by a series of legislative and regulatory changes designed to improve complaints handling and dispute resolution. One of the most notable developments has been the amendment of ASIC regulation 165 (RG 165), which now includes a renewed emphasis on timely resolution of complaints prior to their escalation to the Ombudsman.

Significantly, the amended RG 165 stipulates maximum time frames for internal dispute resolution processes, while also requiring financial service providers to implement a system for informing complainants about the accessibility of external dispute resolution schemes. This emphasis on timeliness is supported by the new FOS Terms of Reference, which now gives financial service providers just 45 days to remedy a dispute before it is referred to the Ombudsman. The Ombudsman has also introduced a new, streamlined process for considering financial hardship disputes. As outlined in the new Terms of Reference, FOS will now seek to arrange telephone conciliation conferences between complainants and financial service providers before moving to vary credit contracts. According to Day, this new process is part of an industrywide effort to support customers in financial hardship. “There’s definitely been an increased emphasis on looking after customers in financial hardship,” she says. “Some of that has come in response to government initiatives, for example, in the measures to assist customers experiencing mortgage stress and some of it was already in place but has been noticeably enhanced.” The new Terms of Reference also require financial service providers to provide FOS with all information relevant to a customer dispute, including any records or files relating to the complainant and reports produced by internal complaints handling staff. As a result, financial service providers such as the CBA are in the process of updating complaints handling software. “We’re putting in place at the moment a new customer feedback system – a very large and very expensive IT project across the group to capture every identified voice of the customer issue, regardless of whether we contact the customer or the customer contacts us,” says French. Day says that in addition to upgrading its complaints handling software, ANZ is also in the process of retraining customer service staff to ensure compliance with the new regulations. While she acknowledges that the reforms have made for a challenging few months, she sees the increased emphasis on timely dispute resolution presents an important opportunity for financial service providers to improve customer satisfaction. “I think it’s been very good because it’s really put dispute resolution where it ought to be, as central to customer retention and customer satisfaction,” says Day. “I think the changes have had a very positive effect in that staff can see that it is essential to actually make the most of disputes, to see them as an opportunity to improve processes and improve customer relations.” Continued on page 12

Financial services

Continued from page 11

Complaints handling as part of the service equation As a result of the recent shift in consumer expectations and legislative and regulatory changes, French says the banking and financial services sector is now increasingly treating complaints handling as part of the service equation. “You can now differentiate yourself by the quality of your problem resolution and the quality of your complaint handling and so businesses, particularly in the finance sector, are focusing very much on improving the way that we handle customer problems and deal with their complaints,” says French. According to French, CBA has made a concerted effort in recent years to improve its customer satisfaction when it comes to complaints handling – a key part of which has been the establishment of independent complaint handling teams. “When it comes to complaint handling we have an independent team, they’re independent of the part of the business they respond to and they’ve got full delegation to resolve complaints as they arise.” ANZ took a similar approach in creating the role of customer advocate in its 2002 Customer Charter. Held by Day since 2007, the role of ANZ customer advocate is to advocate for a fair and reasonable outcome for complainants. “I only become involved in disputes that have been through the usual internal complaints resolution procedure and haven’t been resolved,” says Day. “I’m the last step before someone goes for external review and I report directly to the CEO of Australia, so I have no line management relationship to business units or complaint teams. In that sense, I can offer a very impartial and objective review of complaints.”

Empowering frontline staff The banking and financial services sector has also moved to improve customer satisfaction by empowering frontline staff to manage complaints more effectively. According to Melvin, NAB is dedicated to empowering its branch staff to resolve complaints when they are initially raised and seeks to support its staff by upholding their decisions. “Your staff need to be trained, they need to be empowered and they need to be able to know with confidence that if they make a decision, no matter how much the customer complains, we will back them on it,” Melvin says. ANZ similarly encourages frontline staff to resolve complaints on the spot, however Day says there is also an emphasis on proactively identifying customer dissatisfaction before it escalates into a formal complaint. “One of the things we’ve concentrated on is training branch staff to recognise when a customer is actually expressing dissatisfaction and when some action needs to be taken about that,” she says. “The emphasis has been on training staff to quickly escalate an issue before it becomes a formal complaint, so rather than thinking that the issue might go away, we are encouraging our staff to deal with it 12 | June 2010 | Consumer Directions

as quickly as possible.” Across the CBA Group, frontline customer service representatives take TOFU as their mantra – that is, ‘Take Ownership, Follow Up’. “We encourage our staff to take ownership,” says French. “So whoever has received the complaint or the problem, they will take direct responsibility and try and fix it up with the customer or track down the right people to do so. And we always now follow up, because a lot of the complaints that we get in this sector historically were about poor responsiveness and that has been significantly overturned in recent years.” The CBA has also implemented a series of award and incentive programs specifically targeting branch staff, which, according to French, has led to a significant improvement in customer satisfaction. “We have very tight KPIs and benchmarks for everybody working in the retail bank. 40 per cent of their KPIs are on customer satisfaction and for most people that is far more than their sales KPIs, so we have a very specific incentive program to ensure that our frontline staff are satisfying customers,” says French. “Three years ago, the Commonwealth Bank represented a third of all Banking and Finance Ombudsman complaints. So one in three complaints that went to FOS were ours. In the last quarter, that number was down to 11.2 per cent, which is less than half of our natural market share. This suggests that our responsiveness to customer needs is far, far better than it’s ever been in the past.” This is also reflected in Roy Morgan’s latest retail banking satisfaction research, which shows an unprecedented increase in CBA’s level of customer satisfaction from 65 per cent in January 2006 to 75 per cent in March this year.

Changing to meet customer needs Despite these focused efforts, and although FOS received less than 20,000 complaints in total for the year 2008-2009, in contrast to the more than 230,000 complaints lodged with the Telecommunications Industry Ombudsman, consumer dissatisfaction with a range of practices in the banking and financial services sector appears to be gaining momentum. “The Global Financial Crisis just changed everything,” says Melvin. “All companies, and not just banks, but all companies now have to have the customer at the centre of everything they say, do and act upon or they’re just not going to survive.” He says, NAB has led the industry in making banking more consumer-friendly in recent months by reducing its standard variable interest rate and abolishing a range of personal and business account fees. “We absolutely took a stance and led the industry in saying, ‘We need to make banking fairer for the customer, for our people and for our shareholders, and all the people in the communities that we work and live in’.” According to Melvin, since NAB promised its customers “more give” and “less take”, complaints have dropped by 50 per cent, while customer satisfaction has increased significantly. Lisa Gray, personal banking group executive, NAB, has

also reported a surge in new customers. “Over recent months we have seen an increase in the number of Australians coming to NAB,” says Gray. “This has been across a range of products, but particularly personal transaction accounts and home loans. We’ve signed up over 145,000 new transaction accounts between October 2009 and February 2010 and over 50 per cent of those were new to NAB customers.” CHOICE spokesperson Christopher Zinn has welcomed NAB’s efforts to make banking fairer and says the bank’s decision to abolish and reduce certain fees is a particularly important win for consumers. According to Zinn, the speed at which Australians have joined the unprecedented class action to recover $5 billion in bank penalty fees indicates a high level of customer dissatisfaction with these practices that banks must address. “Given the sums of money that are involved and the legal precedent, it’s something we watch and await with great interest,” he says. In the meantime, Zinn is hopeful that Australian consumers will begin pressuring other institutions to follow NAB’s lead. “I would hope that some of the inertia in shifting from one

bank to another is beginning to wear off,” says Zinn. “There’s been a lack of competition with the big four and I know credit unions are interested in raising their profile. For most people, the range of services a credit union can provide is equivalent to that the banks can do.” According to Melvin, consumers are already demanding that NAB’s competitors follow its lead and he believes that doing so will be crucial in ensuring long-term profitability. “Success for us will be other banks changing to meet what we’ve done,” he says. Whether banks and other financial service providers choose to lower interest rates, abolish fees and charges or refocus their energies on enhancing customer experience, complaints handling and dispute resolution, Day says it is clear that there is a need for continuous improvement. “Customers have a very high-level expectation in the banking and financial services sector and it is right that they should have that,” she says. “You can have very high levels of customer satisfaction, but that doesn’t mean that you can rest on that. We really need to work all the time to keep improving services”. cd


Saying Not to be confused with complainants demonstrating unreasonable complainant conduct, customers who simply won’t take no for an answer – despite the best efforts of those who communicate with them to either satisfy their requests or explain why they are unreasonable – can consume considerable amounts of time and energy. So how do we handle this particular type of complaint? Freya Purnell reports. Sometimes it is simply not possible to give the customer what they want in response to a complaint or a wellmeaning suggestion. Rather than take ‘no’ for an answer, this can further energise some customers who will then escalate the matter, consuming issue-handling resources and raising costs even though, in the end, the answer probably won’t change. It’s not that they’re being ‘difficult’ necessarily, just that they won’t let go. It is important to clarify that this is not about ‘handling unreasonable complainant conduct’, which is a topic of itself concerned with inappropriate or aggressive customer behaviours. Our focus is instead the persistent, enthusiastic or ‘never take no for an answer’ customer who may be completely reasonable and polite in their actions but nevertheless cost the affected organisation time and money, causing escalation and perhaps political or media attention, driven by the customer’s zeal or persistence. For example, think about a train traveller who thinks that putting cappuccino vending machines in carriages is a good idea, and when thanked but (politely) told the idea won’t be pursued, then writes to the CEO, or the Minister, or goes to the talkback circuit to promote the idea. In order to investigate this issue, Consumer Directions spoke to those involved in complaints handling from a range of organisations, such as government, banking and financial services, telecommunications, member services, health insurance and external Ombudsman schemes. Some spoke on condition of anonymity, but together they provide an enlightening view of this particular challenge for complaints handlers.

Persistent complaints: the scope Most of the organisations we spoke to identified this type of persistence as a problem – however it tended to be fairly rare. While the incidence of persistent 14 | June 2010 | Consumer Directions

complaints (again, as opposed to complainants with unreasonable complainant conduct) tended to be around one per fortnight, it depended on the overall volume of complaints received by the organisation. Samantha Gavel, Private Health Insurance Ombudsman (PHIO) says, “Our view is that it has gradually increased. I think people are a lot more assertive these days. That’s a good thing – the downside is that they can be more inclined to be more assertive towards staff.” Gavel says the PHIO also sees complainants who are pursuing their complaint on ‘moral’ grounds issue, “so it won’t happen to anybody else”. “They feel there is a moral issue that they want fixed and they just won’t let go. They will keep coming back – they want you to refer it to the ACCC and they will then go to the Minister’s office,” Gavel says. In the health insurance sector, nib health funds customer service manager Mark Peno says this type of persistence can be a major problem across the sector, partly because the industry itself can be quite complex, and also because of the emotive nature of health insurance. “A person’s health is extremely important, and regardless of who is at fault, customers tend to react emotionally if they find out that they are not covered prior to or after going to hospital,” Peno says. He says nib itself has a robust system to either educate or escalate customer complaints to get a suitable solution, but believes the incidence of persistent complaints has increased slightly, which he attributes to the economy and customers being more conscious of what they are getting for their money. “There will be times where customers thought they were covered for something and they weren’t, which are probably the most difficult complaints. We encourage customers to have regular health cover reviews to make sure they’re on the best suited product and to check with nib before going to hospital to avoid any nasty surprises,” Peno says. A representative of the telecommunications industry says a common example of persistent behaviour in

this sector is where customers will persist with their complaint through escalation and refuse to accept outcomes, perhaps in order to secure free mobile phone handsets from the company. In the government sector, this type of persistence is frequent, and is often expressed through complainants continuing to raise different issues, putting forward their issues in a different way to appear as though they have new information to add to the complaint, or questioning the information provided by the government agency, to prolong the handling of the complaint. Speaking about the financial services sector, ANZ customer advocate Rhonda Day says some people do move from being a vigorous advocate for a point of view that is entirely reasonable to unreasonable and persistent conduct, with behaviours such as unreasonable demands on time or more than one approach across the organisation. “Some people might take up issues for idealistic reasons, but the majority I am dealing with have got quite a degree of self-interest in the outcome,” Day says. Again, she believes complainants who display this type of persistence only represent a very tiny percentage of overall complaints, but believes the resources required to address them can mean it seems like a bigger problem as a proportion of all complaints. As a member services organisation, NRMA Motoring and Services deals with people who often have a high degree of loyalty to the organisation. Simon Tracy, member resolutions team manager, says his team also sees very persistent complainants, often in relation to situations where the complainant believes their car has been damaged during road service. He says some people do persist with their complaint under the guise of ensuring that “it doesn’t happen to someone else” – but this occurs in a very small minority of cases. “You can go through a lengthy process of reassuring people that this won’t happen again and steps were taken to address the issue, but they still may not be satisfied with the response. You get the sense then that they are looking for something else for themselves, which then leads you to question the motives for the complaint,” Tracy says.

A different category of complaint? In most cases, persistent complaints are handled in much the same way as other complaints, using the usual escalation processes. None of the organisations we spoke to have processes or policies specifically for persistent complaints, but given that elements such as providing feedback so processes are changed for others, or questioning outcomes are common features of such complaints, following up can be important. “A recent example was one of our statements was sent out with information which the customer believed was slightly misleading, and we believed it wasn’t. What they wanted to know was not necessarily how we had fixed it so it was correct for them, but how we would ensure that the next person got the right information. In

... the education of the customer begins at the outset of the relationship with the company.

these situations, we not only make sure that they have the right information, but we also diarise to call them a month or two down the track to let them know how we have implemented the changes,” Peno says. He adds that for persistent complaints where it is difficult to obtain a resolution, the complaint will undergo an independent review within the organisation. A more senior representative from nib may also contact the customer to gain a better understanding of the case and acknowledge that nib is treating the complaint seriously.

Best practice for persistent complaints Despite there not being a wealth of specific processes or strategies for dealing with persistent complaints, there is consensus that best practice for handling these types of complaints starts with proper education of the customer, followed by escalation as necessary. Peno believes the education of the customer begins at the outset of the relationship with the company. At the Ombudsman level, Gavel says that expectations for complainants must be set from the first time they call. “That’s quite a difficult thing because you don’t want to sound unhelpful and that there is nothing you can do for them, but you have got to get that balance right, because if you are promising the world, they are going to be aggrieved when you can’t deliver,” she says. That also means explaining the process of how the complaint will be dealt with, and for staff, ensuring they are not distracted by persistent behaviour and overlook a genuine issue that needs to be addressed. “We have a process in place for escalating a complaint if somebody is not happy with the result they get when they call our complaints handling team. The complaint will go to a supervisor who reviews that independently and if again, they are not happy, it can come to the Continued on page 16


Continued from page 15

director of policy or even in rare cases, it may come to me as the Ombudsman,” Gavel says. “I think that’s a really important check and balance, that people have an independent view of their complaint.” Once this has been done, there may be little more the Ombudsman’s office can do for the complainant. “What’s really important is to have a point where you say, ‘We have really looked at this complaint and that is what we believe is reasonable, and we are not going to look at it any further’,” Gavel says. However she acknowledges that as an Ombudsman they have this power enshrined in legislation, whereas other organisations may not have the choice to terminate contact with a customer or consumer. The NRMA is one organisation with a well-established relationship with its members, making the potential for damage to this relationship perhaps more significant. “Our members have often been renewing their membership for many years, and they have a very strong sense of engagement and ownership with the company, which means that their expectations are different to those of customers of a normal business,” Tracy says. When considering how to resolve a persistent complaint, he says they will take into consideration years of tenure as a member, the significance of the issue, and whether it could potentially damage the company’s reputation. “While we might not be able to find any specific person or process at fault for the complaint, if the complainant has been a member for 25 years, has only called for road service twice, and when they did, they had a bad experience, we will often offer a goodwill gesture just to recognise that they had a bad experience. Ultimately there is a price point whereby to fix an issue or to have a situation resolved to a member’s satisfaction, it is worth paying for,” Tracy says, adding that there is not a fixed policy on this, and each complaint is dealt with on a case-by-case basis. However if an investigation shows that the NRMA is not at fault and the customer continues to believe it is, the complaint is then escalated to the owners of the business unit concerned. “The business owner needs to make a commercial decision based on all the evidence that we have uncovered in our investigation, do they want to keep pursuing it for the sake of that amount of money if it goes to Fair Trading or down a legal path, or are they happy to make a contribution, pay the amount or negotiate to resolve the issue,” Tracy says. Similarly, the government sector representative believes escalation to the Minister, Commissioner or the Ombudsman is often the only answer if the complaint cannot be resolved to the consumer’s satisfaction and they continue to revisit the same issue. Day says when dealing with persistent complaints, the focus – as with all complaints – is on treating all customers with respect, taking complaints as an opportunity to improve practice, listening actively and 16 | June 2010 | Consumer Directions

managing expectations of the process. The telecommunications industry representative also says they try to remain action-oriented, keep the conversation focused on positive outcomes and use empathy and clarification techniques to truly understand the issue. If the complaint cannot be resolved, the customer is referred through an internal escalation process, ending up with an independent arbitrator and then the Telecommunications Industry Ombudsman. Several of the organisations we spoke to mentioned the Commonwealth Ombudsman’s Better Practice Guide to Managing Unreasonable Complainant Conduct as being a particularly good resource in terms of strategies to deal with persistent complainants. Another theme when discussing best practice to manage persistent complaints is that while organisations can give staff guidelines on what might be considered best practice to handle these types of complaints, they must look at every case on the basis on its own merits. “We look at every case individually and do what we think is fair and reasonable at all times,” Peno says. “Sometimes no will be the correct answer, but it’s how you say it that is important.”

Saying ‘no’ Eventually some complaints reach the point where the organisation simply has to say no to a customer’s persistent requests. But how this decision is reached and communicated is of crucial importance. Almost all the organisations we spoke to emphasised the importance of ensuring the complainant has had a fair hearing, and that the issues raised have been thoroughly investigated. Gavel says she is comfortable with proceeding to saying no to a complainant once the complaint has been fully addressed and a reasonable outcome has been determined, and most complainants are able to let go of their complaint at this point. “Very occasionally – maybe once a year – you will get somebody who might send rude emails or tell you that they will go to the Minister, Prime Minister and Governor General,” Gavel says. Peno says NIB never says no categorically without an explanation. “Like any business, we may come to the point where we are going to have to decline a request, but we never do it without a thorough explanation of why, what we could potentially look at in the future, and what options are available to the customer,” he says. How no is presented is particularly crucial – and if done the wrong way, it can actually generate complaints. “Often when I get a complaint escalated to me, it is because someone has just said no outright,” Tracy says. This is where communication skills become paramount. “Sometimes the best outcome you can get is that the customer is happy with who they have dealt with, and even though they haven’t been able to get the

answer they wanted, they are prepared to deal with the organisation again,” Peno says. Day agrees that this outcome is a good result. “In some cases people will actually say, ‘I can see your reason for not doing what I have requested, I am happy with the process, not quite so happy with the outcome’, and that’s fine because that means that the person has actually been dealt with respectfully. They feel that they have been taken seriously and they accept your reasons for not proceeding with the matter,” Day says. She says that while saying no, she focuses on putting the decision forward as politely as possible, keeping the discussion to the key issues and being consistent. Sometimes this does not bring the complaint to a close, however. “If the customer then shows really unreasonable behaviour, which can happen – constant contact, trying to get different views from different staff – I then set limits and conditions. I let the customer know I am managing the issue and what I can do. You need to limit contact to one person and limit the channels of communication,” Day says. In extreme cases, sometimes an organisation may have to make the decision to simply terminate contact

with the customer. “We can exercise that discretion but it is very, very rare that we do because basically we are looking at customer retention and customer satisfaction,” Day says. Tracy also says the NRMA would take this course of action with a very small minority of complaints. For government sector organisations, they may have to refer a consumer to other avenues of appeal. In situations where the consumer persists, there may be limits placed on the way the consumer can contact the orgnisation. Again, the government sector representative we spoke Continued on page 18

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Continued from page 17

to says these situations are very rare, as “we really try not to cut off those channels with consumers”.

Seeing the positives While persistence may be somewhat difficult and timeconsuming to manage, there is a positive side – clearly the customer is quite passionate about your service and providing feedback. So are there positive, cost-effective ways in which this energy can be channelled for the benefit of the organisation? Most of the organisations we spoke to had mechanisms for passing this feedback on to the business. The telecommunications industry representative says their organisation takes customer feedback very seriously in terms of identifying opportunities to remove irritants – although sometimes there are commercial reasons why a customer’s view, though valid, may not be adopted. In the government sector, feedback is forwarded to the right people within the organisation, and where possible, the consumer is updated on what is being done to address the issue. On occasions, they may organise for the consumer to come into the office and talk the issue through with a representative from the specific part of the organisation, perhaps regarding internet services or the finance department, but this action receives a mixed response – some consumers are satisfied, while others don’t believe anything will improve. Similarly, Day says that depending on the issue, ANZ makes the customer aware of what the bank has learned and the positive gains from the interaction. “I will let them know we have a voice of the customer forum within the bank, which is a very senior group led by the CEO of Australia. Basically complaints and issues are taken to that forum, and they look at whether there are improvements or system issues that can be identified. That will often satisfy the customer,” Day says. “I think the best way of dealing with it is to ensure the person knows you are making something of the complaint that is being brought to you.” The NRMA also values feedback through individual complaints, so this information is passed on to the relevant people in the business. “Our CEO is very focused on making sure that the feedback that comes through is as objective as possible. There is a strong appetite within the NRMA for individual cases, because the company has been around for a long time, and our business is about helping people,” Tracy says. “So people like to hear about individual complaints because it gives us an opportunity to learn about issues. You can go down the path of changing processes just by hearing the story about that particular complaint and about all the touch points where it could have been fixed. Those can actually be very powerful ways for the business to learn because it actually comes down to what individuals did.” He also believes that because the business says it 18 | June 2010 | Consumer Directions

welcomes feedback, it sometimes can be important to acknowledge to the complainant that their feedback is actually valued, by providing a small gesture of appreciation – even if that is by giving the member a fuel card or a small extension of membership.

Costs to organisations As with dealing with difficult complainants, the cost to the organisation of this type of persistent behaviour can be significant, particularly in terms of the time and staff resources that need to be allocated to it. One of the problems with this behaviour is that a persistent complainant may keep contacting the organisation through the initial point of contact, which may become stressful for the staff member. “Not all complaints are difficult, but it can weigh down an employee if they deal with the same complaint over a short period of time. Nib has an escalation policy to help avoid these situations and to reinforce to the customer that we are taking the complaint seriously,” Peno says. In addition to staff resources, there are often other costs associated with persistent complaints – such as fees for escalation to an external dispute resolution scheme or offers of compensation. On occasion, that requires a commercial decision to be made about whether it is worthwhile for the organisation to simply resolve the complaint. “For every resolution, I look for a balance between a fair and reasonable outcome and a cost-effective resolution, and sometimes I have to make a commercial decision, even if I am not convinced that the customer is right, that will actually bring the complaint to a conclusion. I make that based on resources required to address the complaint, the cost if the complaint went externally and the actual issue of retaining and satisfying the customer,” Day says. However, Peno comments that while some of these individual complaints may cost more to resolve, positive changes identified as a result may actually provide a greater net benefit for the organisation. cd

SOCAP events in Canberra and Brisbane SOCAP Australia members and their staff have attended several training programs over the past few months, including Letter Writing for Complaint Handling and From Rage to Reason. These skillsbased workshops were all sold out, so we encourage members and their staff to register for programs early to assist us with planning and managing numbers. If you would like to run any of these programs in-house for you and your team, please contact us here at SOCAP directly to coordinate.

discretion of the complaint handler is limited. Thirty-two people members of the government sector attended and participated in the discussion. Due to the support expressed by attendees for a complaints network for the sector, SOCAP Australia will seek to host two activities per year for Canberra members and guests, along with the Government Forum at the SOCAP Symposium each year. SOCAP also plans to deliver training workshops on this topic in both Sydney and Melbourne during the next 12 months.

likely or would not recommend an organisation where there is no satisfactory resolution; • Customers prefer resolution at place or point of purchase; and, • Emotional intelligence is important to complaint handling. In the words of one attendee “We are a society, not an economy and everyone is a person first, and consumer second.” Thanks to all who attended.

Networking Breakfast: Brisbane

Future programs

Government Forum: Canberra On 4 March 2010, SOCAP Australia held a discussion forum in Canberra for government agencies with thanks to our sponsor, Resolve. The purpose of the forum was two-fold: to gauge interest in establishing a ‘complaints’ network of interested parties via a SOCAP special interest group or forum; and for participants to discuss their experiences in managing unreasonable complainant conduct in circumstances where the

Book review

Twenty-three Brisbane members and guests attended the breakfast on the ways in which customers expect you to approach them to form an effective relationship. The information was presented by Peter Gillson, SFI and drawn from the results of the recent Consumer Sentiment and Emotion NOW study, including: • 85 per cent of consumers are less

Think Less, Be More: Mental Detox for Everyone Author: Dr Christine Maingard Available from the SOCAP Australia Book Shop at Dr Christine Maingard’s new book, Think Less, Be More: Mental Detox for Everyone is a powerful guide for finding happiness in the 21st century. Drawing on her unique blend of qualifications and experience in educational psychology, cognitive behaviour, organisational learning, business management and leadership, Maingard offers a series of insightful and practical strategies designed to help you free yourself from the negative influence of your own thinking. The book’s message is simple: think less, think differently and distance yourself from the merry-go-round of your own mind! In the opening chapters, Maringard uses real-life examples to explain how stress, anxiety and information overload can affect your health and wellbeing. After describing the causes of anxious thinking, she then introduces her concept of ‘mindfulness’ and explains how it can be applied to every aspect of life from thinking, listening and speaking to simply living and eating. Chapter 6 focuses specifically on the workplace and offers invaluable advice on how to survive workplace chaos,

9 & 10 June – Perth Consumer Law Update and Complaints Intensive 2 July & 16 July – Sydney/Melbourne Strategy for Complaint Handling 20 & 27 July – Melbourne/Sydney Phone Skills Mastery for Complaint Handling For details go to or email us at

overcome boredom and stagnation and deal with the madness of multi-tasking. Taking readers on a journey towards a more mindful life, the book also provides an Eight-Week Mental Detox program for maximum impact and long-term stress reduction. “As executives constantly striving to deliver our personal best in the workplace and at home, being ‘mindful’ of all facets of our health – mental, physical, emotional and spiritual, is perhaps our greatest challenge in today’s business environments. It is a timely and important book. It combines practical strategies with insightful reminders, drawn from professional experience and personal learnings, to help us develop greater resilience and achieve better balance in our lives – the key attributes for successful leaders, managers and executives of the future.” – Jo Fisher M.D, Jo Fisher Executive. Dr Christine Maingard will be presenting on mindful strategies at the SOCAP Australia 20th Anniversary Symposium, 24-26 August 2010, in Melbourne. Visit www. to register.

Consumer Directions June 2010  

SOCAP Australai's quartley publicaiton for members - this issue includes a financial services feature, recent research on "saying no" as wel...

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