ASIC Releases Updated Guidance on Complaints Handling

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New complaints handling requirements come into effect on 5 October 2021. These changes will apply to both Australian Financial Services Licence (“AFSL”) holders dealing with retail clients and Australian Credit Licence (“ACL”) holders.

To give firms time to prepare for the introduction of the new requirements and standards surrounding complaints handling, ASIC has released Regulatory Guide 271 (“RG271”) outlining the updated requirements for how AFSL and ACL holders deal with complaints under their Internal Dispute Resolution (“IDR”) processes.

What changes were made?

The updated standards and requirements in RG271 will ensure that consumers have access to fair and timely complaints handling processes.

Some of the key changes made in RG 271 include:

  • amending the definition of ‘complaint’ to include complaints made to a financial firm’s social media channel;
  • a reduced timeframe for responding to complaints from forty-five (45) calendar days to thirty (30) calendar days for standard complaints;
  • outlining the information required for written IDR responses to assist consumers in determining whether to escalate their complaint;
  • new timeframe requirements for customer advocate reviews of appeals against IDR decisions;
  • guidance relating to how firms can deal with representatives who are not acting in the best interests of the consumer; and
  • the requirement to make a financial firm’s complaints policy publicly available on its website and readily accessible in a range of formats and languages.

When will the new changes come into effect?

ASIC has specified a transition period to allow financial firms with existing IDR processes to make any necessary internal changes to comply with the new IDR requirements. RG271 will apply to complaints received by financial firms on or after 5 October 2021.

For complaints received before 5 October 2021, Regulatory Guide 165 (“RG165”) will continue to apply. ASIC will withdraw RG165 on 5 October 2022.

Background

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.

To ensure the overarching objectives of Chapter 7 of the Corporations Act 2001 (Cth) are met, ASIC has set standards and requirements for financial firms that detail with retail clients to have a dispute resolution system in place that consists of:

The aforementioned 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 services;
  • fair, orderly and transparent markets; and
  • the reduction of systemic risks.

Further reading

Contact information

If you have any questions about the new complaints handling requirements and how these will affect you, please contact us.

About The Author

Olivia Hua

Olivia assists with AFSL and ACL applications and the development and implementation of compliance policy documents. Olivia also supports senior staff with ongoing compliance and legal requirements of clients, the preparation of various legal agreements, and conducting legal research.

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