Australian Securities and Investment Commission (ASIC) has released updated requirements for how financial firms deal with consumer and small business complaints – under their Internal Dispute Resolution (IDR) procedures.
“Complaints handling is the first step in the dispute resolution framework and plays a critical role for firms to restore consumer trust when things have gone wrong. A financial firm’s approach to complaints handling is a meaningful measure of how it treats its customers and listens to their voice,” said ASIC Deputy Chair Karen Chester.
National Insurance Brokers Association (NIBA) CEO Dallas Booth said, “We are having a good look at the new Regulatory Guide on complaints handling, and we will provide information on the new requirements to members soon.”
The Australian Financial Complaints Authority (AFCA) has welcomed the guidance. AFCA CEO and Chief Ombudsman David Locke said, “AFCA firmly believes that IDR plays a crucial role in the framework to resolve complaints about financial services,” Locke said.
Locke added that IDR processes provide financial firms with an opportunity to resolve complaints before they are lodged with AFCA.
Regulatory Guide 271 Internal dispute resolution (RG 271) has been released after consultation with consumer and industry representatives.
“Most financial firms, like us, want to see positive complaint management cultures that welcome complaints and focus on fairness, quality and timeliness in how they are handled. Better IDR not only benefits consumers and small business, it arms the boards of financial firms with rich and real time data on the customer experience and whether their needs are being met or not”, Chester said.
ASIC’s updated standards and requirements will drive fair and timely complaint outcomes for consumers and sharpen industry’s focus on systemic issues. RG 271:
- introduces reduced timeframes for responding to complaints, including superannuation complaints
- sets out what information firms must include in written IDR responses to allow consumers to decide whether to escalate their complaint
- sets new timeframe requirements for customer advocate reviews of appeals against IDR decisions
- gives guidance about how firms can deal with representatives who are not acting in consumers’ best interests.
ASIC will publish a legislative instrument alongside RG 271 which clarifies the enforceable IDR standards and requirements.
ASIC has given industry until 5 October 2021, to comply with the new IDR standards and requirements.
“While this extended timeframe reflects the impacts of COVID 19, publishing RG 271 now gives affected firms certainty and enough time to make systems and other changes necessary to meet the updated regulatory guidance”, Chester said.