Will your dispute resolution system pass the test?
ASIC is seeking feedback on its proposed changes to internal dispute resolution (IDR) standards and reporting in financial services firms. As special counsel Selina Nutley warns, if implemented, these changes will require financial services firms to broaden internal policies and revise material distributed to clients detailing complaints processes.
ASIC's Regulatory Guide 165 (RG165) sets out what financial services firms must do to have a dispute resolution system in place which meets ASIC's requirements. Recently, ASIC released a consultation paper seeking feedback on some proposed amendments to RG165 relating to IDR processes. Some of the key proposed changes are as follows:
- Amending the definition of a "complaint" to include—
- an expression of dissatisfaction made to or about an organisation related to its products, services, staff or the handling of a complaint, where a response or resolution is expected or required
- complaints made by identifiable consumers on a firm's social media platform.
- Introducing mandatory recording (from 30 June 2020) and reporting of complaints data to ASIC every six months (from 30 June 2021), including complaints resolved at the first point of contact.
- Implementing processes and systems, including metrics and data analysis and board reporting, to identify and deal with systemic issues through the IDR process.
- Reducing the maximum IDR response timeframes, from 31 March 2020:
- for superannuation complaints, to 45 days (reduced from 90 days)
- for other complaints (excluding some credit complaints), to 30 days (reduced from 45 days).
What does it mean for you?
Given the likely increased workload through additional reporting and analysis obligations, financial services firms may need to increase staffing in their remediation and IDR teams.
ASIC aims to release new IDR standards by the end of 2019, as well as separate consultation papers on the publication of IDR data in early 2020. We will keep you up to date with any developments.