We make over 800 complaints to Veda on behalf of consumers each year.
Some of these complaints are escalated to an external dispute resolution scheme in order to achieve a result for our clients. To date, Veda’s dispute resolution scheme has been the Financial Ombudsman Service.
We also make hundreds of complaints each year on behalf of consumers and companies against financial services providers to both the Financial Ombudsman Service (FOS) and the Credit and Investments Ombudsman (CIO). We do this when we believe there is a valid case to answer, and a consumer has been treated unfairly.
One week ago, it was revealed in the Sydney Morning Herald that Veda had changed its credit scoring model – https://ow.ly/fHoF30911ns. This has apparently led to a decline in credit scores, on average, of 110 points.
Veda was recently acquired by the multinational credit reporting behemoth, Equifax. Veda will change their name to Equifax in less than a month. There is no doubt that the new scoring model has been introduced by the new owners.
But this isn’t the biggest story out there.
What people are not yet talking about is that in December 2016 Veda changed external dispute resolutions schemes from the FOS to the CIO. This change ensured that consumers and companies will have less success complaining to an Ombudsman about Veda’s practices.
On the FOS’ website it reads:
From 12 November 2016, Veda Advantage Information Services and Solutions Ltd (Veda Advantage) is no longer a member of FOS Australia. Disputes relating to Veda Advantage should be lodged with the Credit and Investments Ombudsman from 12 November 2016. https://www.fos.org.au/resolving-disputes/before-you-lodge-a-dispute/
Every time a complaint against a Financial Services Provider (FSP) or Veda is successfully accepted by an Ombudsman, the FSP or Veda have to pay. If they do not resolve the complaint quickly and the complaint is escalated, the fees payable increase. By the time a case is Determined there is a large fee payable by the FSP or Veda.
Veda expressed their dissatisfaction with this is 2014, to the FOS, because the FOS held them accountable for actions they took outside of the Privacy Act: https://www.fos.org.au/custom/files/docs/fos-terms-of-reference-proposed-changes-july-2014-submission-veda.pdf
This effectively meant that there were more avenues in aid of a consumer or a company via the FOS, and Veda did not like it.
There is no doubt, in our experience of making thousands of FOS complaints, that FOS is the gold standard in External Dispute Resolutions schemes. The Terms of Reference of the FOS and the CIO are the basis upon which the EDR accepts complaints, reviews complaints and makes Determinations.
The FOS holds credit providers accountable for their actions beyond the Privacy Act, and includes other relevant codes and rules, that the FSP and Veda must adhere to. The FOS regards this approach as best industry practice, and so it is.
The CIO on the other hand limits complaints to the Privacy Act, thereby lessening the scope for accepting disputes and positive outcomes for consumers and companies.
Given the inherent bias in both EDR schemes already, as discussed here: https://ow.ly/GJou30933YU, this is a really serious problem.
By changing to the CIO, Veda has ensured that there will be less complaints about them that are accepted. This ensures they will pay less for dispute resolution.
However, 20 million consumers and companies who Veda now holds credit reporting information on, have less avenues to complain about Veda’s practices.