How can External Dispute Resolution (EDR) schemes help?

EDR schemes help people resolve problems with some businesses.

If your debt is from one of the following businesses there is an EDR scheme that could help you sort out your debt (even if the debt has been passed to a debt collector). These businesses are required to be members of the EDR schemes:

The scheme will look at your complaint by considering the facts provided by you and the business. The scheme may even help you to present your complaint. This does not mean that any complaint will be decided in your favour.

The scheme will get the business to provide a response to your issue and request, and if you are still not satisfied will look into your matters. They will refer to the law and good industry practice, and what is fair and reasonable in all of the circumstances to decide on the matter.

You have nothing to lose by going to EDR and they will make the business listen and respond to you or provide you with financial hardship options. In the case of a legitimate creditor mistake EDR can enforce a change. However, they cannot force companies to waive legitimate debts, fees and charges on the basis of financial hardship, althought they can make recommendations about dealing with customers who are facing financial hardship.

What are the benefits of using an EDR scheme to help with a debt problem?

Going through an EDR scheme is free for consumers. EDR is independent, easy to access and outside of the court system.

Can a business or creditor take court action or other legal action if I have taken a problem to EDR?

No. While your matter is with the EDR scheme the business, creditor or debt collector cannot take enforcement action (e.g. repossess secured goods or take court action).

What if we reach an agreement?

Where an agreement is reached about the amount of money owed it is possible to make a court enforceable payment agreement recording the amount owed. It is recommended you see a financial counsellor to make sure that the new payment plan you are about to agree to is realistic in your financial circumstances.

When can I take a matter to EDR?

You can take an issue to EDR anytime after you have tried to talk to the creditor about your problem and are not happy with their response or did not get a response. Even if the business has started court proceedings, you can still go to EDR. However, you cannot raise an issue with EDR if judgment has been entered, see 'Judgment'.

What do I have to do to take a matter to EDR?

Talk to the business first. It is a requirement that you try to resolve the issue with the business first, before going to an EDR scheme.

Contact the business to discuss your issue, and ensure that they are given all the information. If you cannot resolve the issue, or the business refuses to agree to your proposal, you should lodge a dispute with the relevant EDR sheme.

Contact the EDR scheme

Contact the EDR scheme that relates to your creditor and debt.

If you are still uncertain or need more help contact a financial counsellor.

What if the creditor or business won’t help me?

You can complain to one of the External Dispute Resolution schemes (EDR).

If the business is not in an EDR scheme, you could try a community mediation service. If the business has already served you with a Final Notice (Form P1) or commenced legal proceedings against you (Form 1 or Form 1S), mediation is available through the Magistrates Court, which provides another way to settle your dispute.