ASIC has updated its guidance on internal dispute resolution, setting out a number of reforms including reduced timeframes for responding to complaints and more specific details of the information firms must include in written response.
ASIC said financial services organisations need to do a better job with their IDR, including achieving better understanding within organisations about what a complaint is and the types of matters that must be dealt with by the IDR process.
It wants to see better capture and reporting of complaints data, improved timeliness, better written communication, organisation-wide accountability and more thorough monitoring of the IDR process.
The new regulatory guide (RG 271) applies to Australian credit licensees, credit representatives, Australian financial services licensees, super fund trustees and unlicensed product issuers.
A complaint is “an expression of dissatisfaction made to or about an organisation, related to its products, services, staff or the handling of a complaint, where a response or resolution is explicitly or implicitly expected or legally required.”
ASIC says it expects organisations to take a proactive approach to identifying complaints. A consumer or small business is not required to expressly state the words “complaint” or “dispute”, or put their complaint in writing, to trigger an organisation’s obligation to deal with a matter through IDR.
Timeliness is a key performance measure. “Findings from ASIC’s research into the consumer experience of the IDR journey indicate that delays and frictions in the IDR process can create real barriers for consumers and damage the consumer-firm relationship,” the regulator says.
Organisations must acknowledge the complaint within one business day of receiving it or as soon as practicable.
A response to a complaint must be provided no later than 30 days after receiving the complaint. There are exceptions to the required response times if the matter is complex.
Credit providers, credit service providers and lessors must treat complaints involving hardship notices or requests to postpone enforcement proceedings as urgent matters.
If the matter is credit-related and involves a default notice or hardship, a response is required within 21 days.
Organisations must have systems in place to inform complainants about access to the Australian Financial Complaints Authority if the dispute is not resolved through IDR.