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ASIC demands faster complaints handling

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The Australian Securities and Investments Commission (ASIC) will require faster handling of consumer complaints under new rules that also demand proactive responses to issues raised on companies’ social media sites.

Financial firms including insurers will have to provide an internal dispute resolution (IDR) response within 30 days after receiving a complaint, compared to 45 currently, a new regulatory guide released last week says.

Receipt of complaints should be acknowledged within 24 hours, or one business day, or as soon as practical, either verbally or in writing, including through email, post or social media channels.

“At this time of economic uncertainty, consumer access to fair and timely complaints handling is more important than ever,” ASIC Deputy Chairman Karen Chester said.

“Making it right when consumers have suffered loss is an important way to stimulate ongoing consumer participation and trust in the financial system.”

ASIC has given industry until October 5 next year to comply, due to COVID-19 disruptions, and will hold further consultations on IDR data reporting regime in coming months.

The definition of complaints requiring a response includes posts on social media channels owned or controlled by the firm, but ASIC says it does not expect entities to identify complaints made through third party accounts or channels.

The guide also warns against downplaying “expressions of dissatisfaction” as feedback, an inquiry, comment or similar.

“We expect firms to take a proactive approach to identifying complaints,” ASIC says. “A consumer or small business is not required to expressly state the word ‘complaint’ or ‘dispute’ or put their complaint in writing, to trigger a financial firm’s obligations to deal with a matter.”

ASIC has rejected any carve-out for insurance claims still in process, noting people can raise matters such as excessive or unreasonable delays in finalising matters.

Firms aren’t required to provide a written IDR response if a matter is resolved to the complainant’s satisfaction within five days or in circumstances such as a commercial decision to provide insurance cover on certain terms.

The new rules modify the definition of small business to one that has less than 100 employees, aligning it with the Australian Financial Complaints Authority (AFCA).

AFCA CEO and Chief Ombudsman David Locke says the regulatory guide supports moves to make internal complaints processes as fair, accessible and timely as possible.

“The updated guide will not only improve the quality of internal complaint resolution but will enable financial firms to deliver better outcomes for consumers and reduce the need to escalate complaints to external dispute resolution,” he said.

RG 271 Internal Dispute Resolution is available here.