The clearance ratio measures the number of complaints that were closed out of all the complaints received.
What does it show?
A clearance ratio of less than 100% indicates that AFCA has received more complaints against a member than it has resolved in the same period. This means the number of complaints open at AFCA about this financial firm has increased during the period. Over time, a constant clearance ratio of less than 100% will result in a financial firm having an increasing number of open complaints with AFCA. This may place strain on the financial firm’s effectiveness to resolve complaints directly with their customers because the financial firm’s open caseload of complaints is growing.
A clearance ratio of over 100% indicates that more open complaints were closed during the period than new complaints were received. This can be an indication that the financial firm's internal dispute resolution function is well-resourced and effective at reducing the need for their customers to escalate their complaint to AFCA. It may also reflect a change to complaint patterns due to the introduction or removal of financial services practices or products.
How the clearance ratio is calculated
The clearance ratio is calculated using the following formula:
Clearance ratio (%) = complaints closed / complaints received X 100
Effective IDR to resolve complaints directly with the complainant
- Ensure your dispute resolution teams have the right mix of human skills, subject matter expertise, time management skills and communication skills
- Ensure your customers know who within your organisation is responsible for their complaint. Early engagement and regular updates and interaction will give your customers confidence that their concern is being treated seriously, minimising the likelihood of the matter being escalated to AFCA whilst it is under review. If the review of their complaint is taking longer than initially anticipated, updating your customer will assist in managing their expectations.
- Have 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.
Engaging with AFCA's process and resolving complaints efficiently
- Treat the refer-back stage as a new opportunity to talk to the complainant and look at the complaint from a fresh perspective
- Contact the consumer by telephone early in the referral timeframe. This is an opportunity to discuss the whole complaint and find out details that could be missed in written correspondence
- If a resolution is reached, ensure the resolution is clear for all parties and provide a copy to AFCA
- If you are unable to reach a resolution, consider the information which will assist AFCA to consider the complaint and provide this prior to the conclusion of the refer-back period.