FPA warns ASIC on social media complaints
The Financial Planning Association (FPA) has warned the Australian Securities and Investments Commission (ASIC) of the dangers inherent in allowing social media to be used as an unmoderated and uninhibited means of filing complaints against financial planning firms and their planners.
The FPA has used a submission to ASIC’s review of Internal Dispute Resolution arrangements to argue that concerns expressed through social media should not, of themselves, be considered complaints in the first instance.
“The definition of a complaint should not be loosened to elevate an expression of dissatisfaction into a matter requiring a fulsome response,” it said.
“Every expression of concern should be dealt with on its merits, but should a concern be completely frivolous, a financial services company should be able to defer handling the matter unless it is escalated appropriately,” the submission said.
In doing so, the FPA has argued that people should not be allowed to hide behind the anonymity of social media and that they should be diverted to well-defined but private channels.
“By having appropriately defined channels for consumers to lodge a complaint, it instils responsibility for the individual to verify the complaint, in writing, through the appropriate channels that will clearly determine that the content is a complaint rather than a vexatious comment,” the submission said.
It said customer verification was a must because true forms of social media such as Facebook, Twitter and Linkedin, were “completely open to abuse by scammers, hackers, social engineers and others.”
“There needs to be a valid connection between the customer and the business, and this cannot be established through social media channels, at least as they operate at present,” the submission said.
Recommended for you
Results are out for the latest sitting of the ASIC financial advice exam, with the pass rate falling for the second consecutive sitting.
Adviser losses for the end of June have come in 143 per cent higher than the same period last year, and bring the total June loss to over 350.
ASIC’s enforcement action is having an active start to the new financial year, banning a former Queensland financial adviser for 10 years in relation to fees for no service conduct.
ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay.
