The Australian Securities and Investments Commission (ASIC) has admitted it preferred the views of consumer groups over the concerns of financial services companies when it reduced internal dispute resolution (IDR) timeframes to 30 days.
ASIC’s position is spelled out in the Regulation Impact Statement (RIS) attaching to the IDR changes in which it acknowledged that industry submissions had broadly opposed the 30-day timeframe because of the complexity of dealing with some complaints, particularly financial advice complaints.
However, the regulator said: “We do not accept that all of the complaints in any particular subsector are inherently complex and require additional time to resolve. Firms should ensure that their record-keeping and customer service functions are appropriate for the level of complexity in their business”.
The ASIC statement said that industry submissions had broadly opposed the 30 calendar day timeframe for non-superannuation complaints.
“Their arguments against this requirement included that:
(a) complaints from specific industry subsectors (e.g. financial advice related complaints and responsible lending related complaints) are all inherently complex and require more time;
(b) the resolution of individual complaints is often delayed by factors outside of the financial firm’s control, such as delays caused by the complainant, third-party insurers or medical experts; and
(c) reducing IDR timeframes would simply push more matters on to AFCA.
“Many industry submissions noted that while they could (and already do) provide an IDR response to the vast majority of complaints within 30 days, the complex cases that require more time are not accurately described or defined as being ‘exceptional’,” ASIC said.
By comparison, it said all submissions by consumer representative groups supported a reduction in IDR timeframes to 30 calendar days for non-superannuation complaints with one submission proposing a 21-day timeframe for all complaints.
“Some of these submissions noted the stress that an unresolved complaint can cause, particularly when a complainant needs to make significant financial decisions (e.g. whether to sell an asset or declare bankruptcy). Consumer legal representatives provided examples where their clients had assumed that their complaint had been rejected due to the long wait times.”
ASIC noted that it had provided exceptions to the 30-day rule where it could be proved particular complaints were complex.