The Australian Securities and Investments Commission (ASIC) has initiated consultation on proposed new standards designed to improve transparency and the handling of complaints across the financial system.
Karen Chester, ASIC deputy chair, noted that “there is room for much improvement” in the handling consumer complaints, with The Ramsay Panel Review, recent ASIC research, Financial Services Royal Commission case studies, as well as its own supervisory work all revealing “the absence of such effective redress and the failure of firms to identify and look into systemic complaints.”
“With the benefit of broad consultation, ASIC’s new standards will lift complaints handling performance of firms and ultimately consumer outcomes and fairness of the financial system,” Chester said. “And transparently so. These standards will also apply in their entirety to all APRA-regulated superannuation funds.”
The proposals include reducing maximum time frames for internal dispute-resolution responses, identifying what constitutes a complaint, setting clear standards about what should be in written reasons for decisions, and strengthening the requirement that firms take a systemic focus to complaints handling.
ASIC’s consumer research found evidence of “consumer fatigue” and IDR shortcomings. Eighteen per cent of surveyed complainants dropped their complaint before it was concluded, while only 45% of complainants receiving an unfavourable outcome reported receiving an explanation from the financial firm of the decision made against them.
Stakeholder feedback on the proposals will be accepted until Aug. 09, with the new IDR standards set to be released by the end of the year. A further, separate consultation on the publication of IDR data will commence in early 2020.