Resolving customer disputes can be tricky business, especially when the company isn’t at fault. And although we’ve all been taught that “the customer is always right,” anyone who has worked in customer service knows that isn’t really true.
I recently returned from a trip to Sydney, Australia where I was the keynote speaker at the SOCAP Australia Symposium. SOCAP, the Society of Consumer Affairs Professionals, has members in financial services, insurance, telecommunications, and other industries who are responsible for handling customer complaints.
The event began with remarks from Anoulack Chanthivong, a member of the Australian Parliament and the Minister for Better Regulation and Fair Trading. He spoke about how the Australian government is working hand-in-hand with companies with both reducing complaints and resolving customer disputes. I was struck by the sense of partnership, all in the name of a better customer experience.
After my speech, I had the pleasure of speaking with a young woman who works in dispute resolution at an Australian bank. What I learned from her can be applied to any business looking at resolving customer disputes.
Resolving Customer Disputes In Australia
In Australia, if a customer files a complaint with their bank, it first goes to an IDR, or Internal Dispute Resolution team. This is similar to standard Customer Service department. Government regulations spell out “how firms must record and respond to complaints, and the timeframes for doing so.”
If the customer and the IDR team cannot reach a satisfactory agreement, then the complaint moves to the Australian Financial Complaints Authority (AFCA). This is also when the bank’s EDR, or External Dispute Resolution team, also gets involved.
“The AFCA is a single dispute resolution scheme for financial services,” according to an Australian government website. “AFCA can resolve complaints that a financial firm could not resolve at IDR.” This can include issues regarding credit, finance and loans, insurance, banking deposits and payments, investments and financial advice, and pensions.
AFCA acts like an arbiter in resolving customer disputes and both parties agree to abide by its decisions.
Related: Don’t Fear Customer Complaints
When A Customer Is A Victim Of A Scam
My friend at the bank described a common scenario in which a customer is a victim of a scam that has nothing to do with the bank. In fact, a whopping two-thirds of Australians aged 15 years and over were exposed to a scam in 2021-22, according to the Australian Bureau of Statistics.
Many of those affected call their bank for help, and it’s a classic case of it not being the bank’s fault but still being the bank’s problem.
In an attempt to preserve the customer relationship, banks may offer a small courtesy payment. They are under no obligation to do so.
It doesn’t necessarily make the customer whole, but it’s meant to help ease the pain – both financial and psychological – of being victimized by a scammer.
Many customers accept the payment, but those who don’t end up talking with my friend in EDR. And this is where it gets complicated.
You see, my friend has seen these scams hundreds of times. So she knows that in the majority of cases, the customer isn’t going to win an appeal – because after all, it isn’t the bank’s fault that the customer fell for a scam.
She patiently explains that the bank’s offer of a courtesy payment is the best offer the customer is going to get, and that any hope of a major payout from the government is misguided. She is caring and empathetic, understanding that being a victim of a scam can be embarrassing and scary.
Importantly, she is also careful to note that the courtesy payment offer is no longer valid once the customer makes and appeal. This is because appeals can take weeks or months to resolve, and that costs the bank time and resources, not to mention angst for the customer. The bank is willing to spend some money in resolving customer disputes, but their patience isn’t limitless.
My friend genuinely wants to help customers, so she tries to steer them toward the courtesy payment. Unfortunately, some customers don’t listen. And almost always, those customers end up with nothing. This is what keeps my friend up at night.
You Can Lead A Horse To Water…
This story made reminded me of the old proverb, “You can lead a horse to water, but you cannot make him drink.” (Incidentally, this phrase dates back to the year 1175 and “may be the single oldest distinctly English proverb that is still used today.”)
Sometimes, though we may have our customers’ best interests in mind, they don’t want to listen to us. Sometimes, no matter how hard we try to make things right, the customer isn’t satisfied. Which reminds me of another famous, but much more recent, quote:
“You tried your best and you failed miserably. The lesson is, never try.” – Homer Simpson
Of course, my friend does try – again and again. And that’s what makes her so great at her job. She is truly a customer advocate, even if not every customer ends up benefitting from her advocacy.
When she asked me what else she could be doing, I told her that she was already doing everything she could, and to not be too hard on herself.
After all, you can lead a customer to water, but you cannot make them drink.
Photos by Dan Gingiss.