An external dispute resolution (EDR) scheme is a free, independent service for resolving disputes between consumers and credit providers. Examples of consumer credit debts include home loans, credit cards and personal loans.
If you have been served with a statement of claim for a consumer credit debt, you can apply to an EDR scheme within 28 days of receiving the statement of claim instead of filing a response with the court.
You can apply to an EDR scheme if you have already tried to resolve your dispute with the bank or credit provider or if they have started a court case against you.
If you apply to an EDR scheme before judgment is entered, the creditor cannot continue with the court case until the EDR scheme has dealt with the complaint.
If it has been more than 28 days since you were served with a statement of claim, the plaintiff can get a default judgment against you. If it is close to 28 days since you have received the statement of claim, you should lodge your EDR application online.
It is usually too late to apply to an EDR scheme after judgment has been entered. You should get legal advice.
There are two EDR schemes:
You can lodge a dispute with an EDR scheme:
To find out if your bank is a member of an EDR scheme, use the search tool on the FOS website or the CIO website.
Both FOS and CIO can consider consumer credit complaints about credit providers for claims up to $500,000.
For more information, go to the Financial Rights Legal Centre website.
You can lodge a dispute with FOS:
You can lodge a dispute with CIO:
Your application should include:
You should tell the creditor or their legal representative that you have lodged a dispute with an EDR scheme and remind them that they must not file for default judgment while the dispute is being considered.
If your application has been accepted, the EDR scheme will contact your bank and try to resolve the dispute through negotiation and conciliation. The creditor cannot continue with the court case or apply for judgment from the court while the EDR scheme deals with the dispute.
If the dispute cannot be resolved by agreement, the EDR scheme will make a decision. If you agree with the decision of the EDR scheme, it will become binding on the bank. If you do not accept the decision of the EDR scheme, you should get legal advice.
It is not too late to file a defence if you do not agree with an EDR decision but you should get legal advice about the strength of your defence. The plaintiff (creditor) can get default judgment if you do not file a defence within 28 days of when the statement of claim was served.
For more information, go to the FOS or CIO website.