Most financial service providers (FSPs) who provide a service to retail clients must belong to an approved dispute resolution scheme (DRS) or the government-established reserve (dispute resolution) scheme, under section 48 of the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSPA).

FSPs must join a dispute resolution scheme before beginning their application for registration as a financial service provider.

Membership in a DRS is mandatory for FSPs who provide a service to retail clients, because it provides consumers with an avenue for redress when a dispute arises with their financial service provider. Membership in a scheme is a pre-requisite for registration as an FSP.

Customers (individuals, or small organisations with 19 or less full time equivalent employees - FTEs) of a financial service provider can access the dispute resolution scheme the FSP belongs to, free of charge.  However, the complainant must take their complaint to the FSP first.  FSPs need to have some internal procedures to deal with complaints.

All dispute resolution schemes will have rules about the complaints process, what the FSP has to do, and what complaints they cover.