With the release of ASIC’s new regulatory guide, the requirements for internal dispute resolution (IDR) is updating within the financial services sector.
Regulatory Guide RG 271 is set to replace RG 165 for more in-depth guidance on how to resolve consumer and small business disputes. This is intended to deliver improved outcomes for consumers and has a much greater, more enforceable reach than the previous guide.
The financial services sector now has until the 5th of October to ensure their IDR is compliant with the new standards, which is when RG 271 is set to come into effect.
What Has Changed?
The new Regulatory Guide includes some key updates, including:
- A broadened definition of ‘complaint’ to include dissatisfaction expressed on social media
- Shorter maximum deadlines for responses to complaints
- Additional resourcing requirements
- Processes to act in the best interest of the customer
- Identifications of systemic issues
- Requirements for firms to include written IDR notices
These changes came about after ASIC collected feedback through public consultation in regards to how RG 165 could be improved. It became apparent that there was a need to resolve consumer complaints in a fair, effective and timely way that reduced the need for external intervention when complaints were escalated.
The IDR standards outlined in the Guide reflects this:
What This Means For Your Business
For financial firms, it is now mandatory to comply with these new requirements by the deadline of the 5th of October 2021.
This means that businesses will need to look at their systems of accountability and reporting, and train and upskill staff accordingly to reflect these processes when handling complaints.
Financial firms will also need to look at any weaknesses in efficiency within their handling processes, as a result of the changes in time frame. This was reduced to 30 calendar days (from the previous 45 days), with some exceptions allowed with the submitting of a ‘IDR delay notification’.
The resourcing requirement is also a reflection of this, as adequate resources will need to be made available to ensure that these matters are resolved promptly.
The additional resourcing will also help to ensure the compliance of the new written IDR responses. These are to be provided to the complainant with enough information for them to understand the final outcome, reasons for the decision and outline their right to escalate the matter to AFCA.
This also links to the identification of systemic issues:
These changes have been coupled with the IDR Instrument which clarifies the new enforceable standards within RG 271. The ‘enforceable paragraphs’ throughout the Guide mean that if the requirements outlined in these are not met, ASIC can pursue civil action to ensure compliance.
How Can You Get RG 271 Compliant Out Of The Box?
Updating and improving your IDR to be in line with the new requirements of ASIC is now crucial.
However, reviewing and implementing the changes that need to be made can be a lengthy process, particularly with continuing to manage customer complaints and industry-specific nuances.
To make these changes easier, look no further than Complaints Pro™ Financial Services Industry Pack.
Complaints Pro™ by Causia™ is a complaints and compliance software with in-built and automated features designed to comply with ASIC’s requirements. It is Australian made and purpose built for the Australian market and is ready to go out of the box.
As a company-wide, cloud-based and integrated solution, you’ll be given all of the tools and templates you need:
- Compliance to all SLA's with reminders alerting you to the complaints that are slipping before you’re in breach
- ASIC IDR response and delay notification templates
- Supports complex processes for AFCA requests including managing IDR timelines with an open IDR and receiving AFCA requests.
- Tracking AFCA streams, resolution point and stages for comprehensive reporting and reconciliation with AFCA invoices.
- Systemic issues and root causes analysis
- Create emails and letter templates and manage final IDR responses from draft to final submission
If you are interested in complying with RG 271 in the simplest way, get in contact with the team at Causia™, or book a demo today!
