There is an industry move that requires brokers to belong to an External Disputes Resolution scheme - EDR. These are intended to provide a structure for disputes to be handled without cost to the consumer. Check out Australian Securities and Investments Commission - ASIC for more information about EDRS’.
There are two EDR schemes: Credit Ombudsman Service Limited - COSL and the Banking and Financial Services Ombudsman - BFSO.
COSL is the most widely accepted EDRS for mortgage brokers. COSL as it is know today (previously know as MIOS) was established by the Mortgage Industry Association of Australia - MIAA. COSL membership is also a requirement as part of Mortgage Industry Association of Australia - MIAA membership.
COSL Constitution, Rules and IDR Procedures are available here.
All complaints are at the expense of the broker.
Prospective members should be aware that in the event of a consumer complaint being lodged with COSL, is it possible for that complaint to be pushed through to be heard by the Ombudsman himself at a cost to the broker of about $8,000 regardless of fault.
The system is such that it is in the interests of a broker to not have a complaint progress with COSL even if that means making a commercial decision and conceding to a consumers demands to resolve it.
It is also a requirement of COSL that you must have a current Professional Indemnity - PI insurance policy. Refer topic on PI Cover.
For a single loan COSL have an Application Fee of $165 and an annual fee of $198 making your first year fee $363. (Correct as at 1-12-05)
This is the link to the membership page of COSL - Click here
Non members of the MIAA can join under category C with COSL.