ASIC has released research exploring the customer experience of internal dispute resolution (IDR) procedures in the financial services sector. Financial services licensees have specific obligations around maintaining an IDR procedure.
As well as reporting on statistics around complaints, the research identified that the following are common obstacles encountered by customers during the complaints processes:
- Structural obstacles – difficulty in finding the firm’s contact details to make a complaint.
- Transparency obstacles – not having the IDR process explained well at first contact and/or being unsure of how long it will take for a decision to be made.
- Customer service obstacles – customers reported feeling that they had not been listened to or heard or that they had been passed around to too many people and ‘strung along’.
Of particular concern to ASIC was that only 45% of complainants that received an unfavourable outcome received an explanation of the decision and only 21% of complainants whose complaints were not resolved in the timeframe set by ASIC guidance had the external dispute resolution process explained to them.
ASIC has advised that the release of this research is the first step in a coordinated body of work that ASIC is undertaking to raise IDR standards and transparency in the financial services industry. Financial services firms should be prepared to engage with ASIC regarding this review. ASIC has asked that all financial services firms closely review the research findings and consider whether any reform to complaints procedures is needed to improve the customer experience and ensure any problems are remedied effectively and promptly.
In addition, ASIC has flagged that from February 2019 it will be publicly consulting on a review of the existing IDR guidance in Regulatory Guide 165 (‘Licensing: Internal and external dispute resolution”).
Further information can be found here.