ASIC has called on financial institutions to review their internal dispute resolution procedures, look for ways to improve the consumer experience and “ensure that identified problems are remedied effectively and promptly”.
And it warned that it has set up a team to conduct on-site IDR reviews.
The regulator’s call follows the release of research into the consumer experience of internal dispute resolution, which found that processes lacked transparency and that a large number of complainants withdraw their complaints before achieving a satisfactory resolution.
ASIC found that 17 per cent of adult Australians considered making a complaint to a financial firm in the preceding 12 months, and 8 per cent (1.5 million people) went on to make a complaint.
Eighteen per cent of complainants dropped out before the process was concluded.
There were a number of common obstacles that consumers encountered. One in seven complainants said they had difficulty finding the firm’s contact details for making a complaint. A quarter said the IDR process was not clearly explained at first contact, and 27 per cent said they did not know how long they would have to wait for a decision.
Asked about service, 28 per cent of complainants said they felt they were not being listened to and 22 per cent felt they were being passed around to too many people.
Complainants said they received few if any progress updates.
Only 45 per cent of complainants who received an unfavourable outcome received an explanation of the decision made against them and only 21 per cent of those whose complaints were not resolved in the timeframe set by ASIC guidance had the next step, external dispute resolution, explained to them.
ASIC commissioner Danielle Press says: “ASIC was particularly concerned about this finding, since each of these steps is essential in assisting consumers to effectively escalate their complaint to an independent and external forum.”
Press says companies should prepare to engage with ASIC about its review. A special team has been set up to conduct onsite monitoring of IDR functions at the big banks, AMP and targeted firms.