As at 30 June 2020, the Australian Financial Complaints Authority (AFCA) had received 80,546 complaints, of which 78% were closed, and $258.6 million paid in compensation. Complaint areas and associated numbers were:
- banks: 28, 411
- general insurers: 15,748
- credit providers: 9,857
- superannuation fund trustees or advisers: 4,732
- debt collectors or buyers: 2,607.
Drilling down to those providing investment advice, complaint areas and associated numbers related to:
- misleading product and/or service information: 757
- inappropriate advice: 585
- failure to follow instructions/agreements: 575
- failure to act in clients' best interests: 469
- service quality: 380.
I'm not complaining, but ...
In July 2020, the Australian Securities and Investments Commission (ASIC) released updated requirements in its Regulatory Guide 271 Internal Dispute Resolution (RG 271) in relation to how financial firms deal with consumer and small business complaints under their internal dispute resolution (IDR) procedures. RG 271 will replace Regulatory Guide 165 Licensing: Internal and external dispute resolution.
With the new and improved regulatory guide on IDR due to commence on 5 October 2021, how will these statistics, clearance rates and customer satisfaction levels be affected? Will the new definitions, compressed timelines, increased policies, processes and allocation of resources see a different result in June 2022?
Despite catching many unawares, the IDR policy consultation has been long and protracted. It commenced in December 2018 with ASIC Report 603 The consumer journey through the Internal Dispute Resolution process of financial service providers (REP 603).
The investigation undertaken by ASIC at the time found that:
- four in five complainants experienced difficulty, decreased satisfaction and formed a negative impression of the financial firm in question
- one in two people whose complaint was not resolved in their favour did not receive an explanation.
- one in seven people found it difficult to find the relevant financial firm's contact details
- four in five people whose complaints took more than 45 days to conclude were not told about external dispute resolution schemes
- one in three people spoke to too many contacts over the course of the complaint
- one in seven people withdrew from the complaint process due to an inadequate response from the financial firm.