The Australian Securities and Investments Commission (ASIC) has released final updated guidance on how financial firms should deal with consumer and small business complaints, under their Internal Dispute Resolution (IDR) procedures.
The regulator said that updated standards and requirements would help drive fair and timely compliant outcomes for consumers and ‘sharpen industry’s focus on systemic issues’ and would include the following (RG 271):
- Introduce reduced timeframes for responding to complaints, including superannuation complaints;
- Set out what information firms must include in written IDR responses to allow consumers to decide whether to escalate their complaint;
- Set new timeframe requirements for customer advocate reviews of appeals against IDR decisions; and
- Give guidance about how firms should deal with representatives who were not acting in consumers’ best interests.
“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,” ASIC deputy chair, Karen Chester said.
“A financial firm’s approach to complaints handling is a meaningful measure of how it treats its customers and listens to their voice.”
According to Chester, better IDR not only would benefit consumers and small business, but would arm the boards of financial firms with rich and real time data on the customer experience and whether their needs were being met or not.
New requirements would also recognise the harm that could be done by some debt management firms and would also assist in addressing long-standing concerns about their behaviour which are shared by industry and consumer representatives.
ASIC said it would publish a legislative instrument alongside RG 271 which would clarify the enforceable IDR standards and requirements.
In the coming months, the regulator would also conduct further consultation on the IDR data reporting regime, which was recommended by the Ramsay Review into dispute resolution and complaints framework and passed into legislation in 2018.
Separately, ASIC was following up with each of the firms that were subject to supervisory on-site visits about the changes they were making to improve IDR outcomes.