Under its Regulatory Guide 271 (RG 271) on Internal Dispute Resolution (IDR), ASIC said standards and requirements have been updated in order to drive fair and timely complaint outcomes for consumers and sharpen the industry’s focus on systemic issues.
Under RG 271, the corporate regulator has:
- introduced reduced time frames 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 time frame requirements for customer advocate reviews of appeals against IDR decisions
- given guidance about how firms can deal with representatives who are not acting in consumers’ best interests
ASIC said it will publish a legislative instrument alongside RG 271 which clarifies the enforceable IDR standards and requirements.
The financial services industry has until 5 October 2021 to comply with the new IDR standards and requirements.
“Most financial firms, like us, want to see positive complaint management cultures that welcome complaints and focus on fairness, quality and timeliness in how they are handled,” said ASIC deputy chair Karen Chester.
“Better IDR not only benefits consumers and small businesses, it arms the boards of financial firms with rich and real-time data on the customer experience and whether their needs are being met or not.”
AFCA welcomed the new ASIC guidance, with chief ombudsman David Locke saying IDR processes provide financial firms with an opportunity to resolve complaints before they are lodged with AFCA.
“IDR is the key to early resolution, which benefits consumers, financial firms and the financial sector broadly,” Mr Locke said.
“In our view, IDR should focus on helping financial firms to improve internal practices to avoid and resolve disputes.
“The updated guide will not only improve the quality of internal complaint resolution, but will [also] enable financial firms to deliver better outcomes for consumers and reduce the need to escalate complaints to external dispute resolution.”