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Internal Dispute Resolution – Australian Credit Licensees

New complaints handling requirements came into effect on 5 October 2021. Regulatory Guide 271 (“RG271”) applies to all Australian Credit Licensees (“Licensees”) and outlines the requirements for how Licensees deal with complaints under their Internal Dispute Resolution (“IDR”) processes.

Definition of ‘complaint’

Licensees’ IDR processes must cover disputes in relation to the credit activities engaged in by the Licensee. RG 271 includes the definition of ‘complaint’ as:

“[An expression] of dissatisfaction made to or about an organization, 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.”

The definition of complaint now includes posts on a social media channel owned and operated by the Licensee where the person posting can be identified and contacted. Licensees also need to keep in mind that the consumer is not required to expressly use the word ‘complaint’ or ‘dispute’, or put their complaint in writing for their expression of dissatisfaction to be considered a complaint.

Licensees will therefore need to ensure they have appropriate procedures in place to monitor their social media channels or turn comments off on such channels.

Responding to Complaints

Licensees must acknowledge all complaints within 24 hours or one business day of receiving the complaint. Acknowledgement of the complaint should generally be informal, in the same manner as the complaint has been received.

Licensees must provide a written IDR response for any complaints where:

  • the complaint is not resolved within five business days;
  • the client requests a written response;
  • the complaint is about hardship.


The written response should include the final outcome of the complaint, including confirmation of the actions taken by the Licensee to investigate and the reasons for the Licensee’s decision, the complainant’s right to take the complaint to AFCA and AFCA’s contact details. It is important that Licensees develop template IDR responses to ensure the correct details are included in every IDR response and the response can be prepared efficiently.


RG271 shortens the maximum timeframe for providing IDR responses for standard complaints to thirty (30) calendar days. For other complaints, refer to the table below:

Type of Complaint

Maximum Timeframe to provide IDR Response

Complaints involving default notices

No later than twenty-one (21) calendar days after receiving the Complaint.

Complaints involving applications for hardship notices or a request for postponement of enforcement proceedings made.

No later than twenty-one (21) calendar days after receiving the Complaint.

Exceptions apply where the Licensee does not have sufficient information to make a decision or if an agreement is reached with the Consumer.

All other complaints

No later than thirty (30) calendar days after receiving the Complaint.

Licensees should ensure they have effective systems in place to easily identify complaints and expedite the IDR processes.

Delay Notifications

Where the Licensee has no reasonable opportunity to provide the IDR response, it must send the complainant an IDR delay notification prior to the expiry of the IDR response timeframe (i.e.: either 21 or 30 calendar days). The IDR delay notification should include the reasons for the delay, the right of the complainant to escalate the complaint to AFCA and AFCA’s contact details.

Licensees should be aware that delays as a result of credit representatives failing to provide information requested do not exempt the Licensee from providing an IDR response to the complainant. Accordingly, Licensees must ensure they have procedures in place to ensure credit representatives provide requested information in a timely manner.

Identification and management of systemic issues

RG 271 requires Licensees to have robust systems in place to ensure early identification of systemic issues, such as a recurring procedural weaknesses or any system errors, which may lead to consumer complaints. It also requires senior management to set clear accountabilities for complaints handling functions, including the management of systemic issues identified through consumer complaints.

Complaints Management Policy

 Licensees have an obligation to make a complaints management policy publicly available to consumers. This policy needs to be easily accessible and free of charge.

How We Can Help

Sophie Grace can assist with all elements of IDR. You can purchase our Internal Dispute Resolution Policy and Complaints Management Policy templates from our website shop. We can also assist with responding to complaints received and establishing robust compliance procedures to help you meet the IDR requirements in RG271.

Contact us if you require further assistance or wish for Sophie Grace to assist in updating your current IDR policy.


Complaints handling is a crucial first step in the dispute resolution process and plays a vital role in maintaining relationships with clients.

RG271 was released after extensive consultation with consumer and industry representatives with the aim of raising IDR standards across the financial sector.

ASIC has set standards and requirements for Licensees to have a dispute resolution system in place that consists of:

  • an IDR procedure that complies with standards and requirements made or approved by ASIC; and
  • membership of AFCA.


ASIC’s overarching objectives include the promotion of:

  • confident and informed participation of consumers and investors in the Australian financial system;
  • fairness, honesty and professionalism by those who provide financial and credit services;
  • fair, orderly and transparent markets; and
  • the reduction of systemic risks.


Further Reading

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