Fewer than half of people who unsuccessfully sought to use internal dispute resolution (IDR) procedures with financial services firms actually received an explanation about why their complaint failed, according to new data released by the Australian Securities and Investments Commission (ASIC).
The ASIC research, revealed in a report, has resulted in ASIC deciding to establish a specialist team which will conduct onsite monitoring of the major banks and AMP with the first onsite review started last month.
The regulator will also be initiating a review of the standards and guidance applying to IDR schemes under Regulatory Guide 165 which will consider the definition of a ‘complaint’, the requirements for complaints and maximum IDR timeframes across all complaints including superannuation.
It will also be looking at the need for superannuation trustees to provide written reasons for decisions made about complaints.
The key findings of the ASIC research were:
- 17 per cent of Australians aged 18+ considered making a complaint to a financial firm in the preceding 12 months ('the considerers')
- 8 per cent went on to make a complaint ('the complainants')
- almost half of those who did not make a complaint reported that they did not think it would make a difference or it was not worth their time, and
- 18 per cent of complainants dropped out or withdrew their complaint before it was concluded.
Common obstacles that were encountered by complainants that directly affected their satisfaction and/or confidence in the complaints process include:
- Structural obstacles: one in seven complainants found it difficult to find the firm’s contact details to make a complaint
- Transparency obstacles: Almost a quarter of complainants did not have the IDR process explained well at first contact and 27 per cent of complainants were unsure of how long they would need to wait for a decision, and
- Customer service obstacles: 28 per cent of complainants reported feeling that they had not been listened to or heard and 22 per cent felt they had been passed around to too many people or strung along.