When assessing performance resolving complaints at the refer-back stage, referral resolution rate and non-response rate are useful measures to show how well a firm is communicating with complainants and engaging with AFCA’s process.

Referral resolution rate

Referral resolution rate reporting looks at the result of all referrals that were made by AFCA back to the financial firm. It measures the proportion that were closed at referral rather than progressing to case management.

It is intended to measure a firm’s effectiveness at resolving complaints early, during AFCA’s registration and referral process.

What does the referral resolution rate show?

A high referral resolution rate shows that a firm is effective at resolving complaints early. This is supported by having skilled and empowered internal dispute resolution teams, with appropriate expertise and communicating with complainants early. Opportunities may exist for a financial firm with a high referral resolution rate to explore ways to resolve complaints directly with their complainants without the need for the complaint to be referred to AFCA. Reviewing touchpoints within a firm prior to the complaint being raised with AFCA may identify opportunities to prevent the escalation of future complaints to AFCA.

In comparison, a low referral resolution rate shows that firms are unable to resolve complaints at registration, with complaints progressing to AFCA’s case management stage. This may be because the complaint is complex and will be unable to be resolved at the referral stage. It may also reflect that a firm needs to further invest in its complaint resolution function to ensure it is sufficiently resourced with the right balance of human skills, subject matter expertise, time management skills and communication skills.

How referral resolution rate is calculated

The “referral resolution rate” is calculated using the following formula:

RRR (%) = Total closed in referral statuses / (Complaints closed in referral statuses + Complaints progressed to case management) X 100

Non-response rate

The non-response rate measures the percentage of complaints that a financial firm did not respond to during the initial refer-back stage of the AFCA process.

The refer-back stage is the period when AFCA refers a complaint back to a financial firm.

What does the non-response rate show?

The non-response rate is a simple way to see how effective a financial firm is at communicating with complainants and AFCA and working to resolve complaints. 

A low non-response rate shows that the firm is communicating during IDR, while a higher rate indicates a firm is not providing a consistent IDR service.

A high non-response rate reflects that the firm is not responding to complaints within expected timeframes. This may be because the firm is not suitably resourced to meet its internal dispute resolution obligations.

How non-response rate is calculated

In AFCA’s reporting, a complaint is classified as having been a ‘Non-response at Registration’ if:

• AFCA and the complainant did not receive the initial response requested by the set due date at the referral stage
• it progressed to our Case Management stage
• there was no change to the progression reason 
• the financial firm’s response did not sufficiently provide their position or supporting documentation.

‘Non-response rate’ is calculated using the following formula:

NNR (%) = Total non-responses at registration / total complaints progressed to case management X 100

AFCA is required to report information about a financial firm’s performance in resolving complaints at the referral stage. This information is also shared publicly on the AFCA Datacube.

Best Practice: Resolving disputes during the refer-back stage

Effectively communicating with complainants during the refer-back stage results in the resolution of many complaints. One in two complaints to AFCA resolve at this stage, without the need for AFCA to investigate the complaint.

Best practice to effectively engage complainants and resolve complaints includes:

• Ensuring your dispute resolution teams have the right mix of human skills, subject matter expertise, time management skills and communication skills
• A genuine willingness to approach a complaint with a fresh set of eyes and an appreciation that a complaint resolved early often enhances a customer’s future engagement with the firm
• Communicating your response to a complaint early and quickly
• Sending your initial response to the complaint to AFCA and the complainant by the due date
• Resolving disputes within the refer-back timeframe (see RG 271 timeframes here)
• Explaining the IDR process to complainants in documentation and communication material
• Providing AFCA and the complainant a sufficient position/response alongside relevant supporting documentation.