ASIC clamps down on financial service licensee complaints process

by AB19 Nov 2013

Recent changes to ASIC's Regulatory Guide 165 mean Australian financial services licensees (AFSL) must now acknowledge client complaints immediately, regardless of the form in which they are given - and resolve problems in tighter, prescribed timeframes.

Charmian Holmes, solicitor director of The Fold Legal (The Fold) says AFSLs need to adjust their current internal dispute resolution system for retail clients in order to comply with the new requirements.

“ASIC has always expected complaints to be dealt with ‘genuinely, promptly, fairly and consistently’; however, they have changed the timeframes for dealing with complaints in order to encourage licensees to act with a sense of urgency.”

Holmes says licensees shouldn’t be complacent about their current dispute resolution system, with key changes requiring a written acknowledgement of the client’s complaint be sent as soon as it is received.

“The licensee can’t wait 24-48 hours to acknowledge the complaint, it must be immediate. Licensees also cannot force the client to put a complaint in writing. If the current system does not comply with these requirements, the system has to be changed,” she says.

If the complaint can be resolved within five business days of initial receipt, Holmes says there is no need for full assessment and investigation except for hardship claims, declined insurance claims or disputes about the value of an insurance claim.

“The outcome and decision must be delivered to the client within 45 days of the initial complaint. Licensees cannot extend this to take account of new information or information they can’t collect from the client, but they do have 90 days to respond to superannuation or traditional trustee services complaints.”

Holmes says if licensees are unable to give a final response within the 45-day period, the client must be told the reasons for the delay and must be directed to an external dispute resolution scheme.

“All licensees should check their complaints procedures to ensure the tighter new timeframes are incorporated in it and review their complaints handling processes to ensure the timeframes can be met. An inadequate internal complaints system is a licence breach,” she says.

 

COMMENTS

  • by QEDRisk 19/11/2013 10:04:08 AM

    1. What is "immediately"? ISO10002 says "in writing within 5 days"
    2. You've never been able to force the complainant to put it in writing, so what's the big deal, ASIC?
    3. Why is the "latest" RG165 on ASIC's website still June 2013?

    I'm growing tired of the lack of professionalism at ASIC.

  • by QEDRisk 19/11/2013 10:13:51 AM

    1. What is "immediately"? ISO10002 says "in writing within 5 days"
    2. You've never been able to force the complainant to put it in writing, so what's the big deal, ASIC?
    3. Why is the "latest" RG165 on ASIC's website still June 2013?

    I'm growing tired of the lack of professionalism at ASIC.

  • by Denise Brailey BFCSA (Inc) 19/11/2013 11:02:46 AM

    That's a bit rich! 150 complaints to ASIC re Lenders and all the complainants received weeks later was fob off form letters. It is ASIC that needs a lesson in complaint handling and precisely why they themselves are the serious subject of a current Parliamentary Inquiry on their own abysmal Performance.