ASIC speeds up complaints process

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Australian Securities and Investment Commission have changed its guidelines on the licensee complaints process, and licensees must act urgently to comply.

Recent changes to Regulatory Guide 165 mean Australian Financial Services Licensees (AFSLs) must now acknowledge client complaints immediately, regardless of the form in which they are given, and resolve problems in tighter, prescribed timeframes.

AFSLs need to adjust their current internal dispute resolution system for retail clients to comply with the new requirements, The Fold Legal solicitor director Charmian Holmes said.

“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 said licensees should not be complacent, as the new guidelines require written acknowledgement of the client’s complaint as soon as it is received.

“The licensee can’t wait 24 to 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.”

If the complaint can be resolved within five business days of initial receipt, 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,” said Holmes.

“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.”

If licensees cannot give a final response within the 45-day period, the client must be told the reasons for the delay and directed to an external dispute resolution scheme.

All licensees should check their Complaints Procedures to ensure the tighter timeframes are incorporated, and review their complaints handling processes to make sure timeframes can be met, warned Holmes.

“An inadequate internal complaints system is a licence breach."

The Fold helps financial services firms manage their legal, regulatory and commercial challenges.