Banks and other financial firms will have to resolve complaints quicker under new guidelines revealed today by the financial watchdog, potentially offering relief in about 420,000 cases.
Customers who file a complaint with their bank could wait as long as 45 days for a fix, but after consulting with the industry, the Australian Securities and Investment Commission (ASIC) has decided that’s just too long.
Under new guidance, standard complaints will have to be fixed within 30 days once the updated rules come into effect.
“At this time of economic uncertainty, consumer access to fair and timely complaints handling is more important than ever,” Karen Chester said, deputy chair of ASIC.
“Making it right when consumers have suffered loss is an important way to stimulate ongoing consumer participation and trust in the financial system.”
But the changes won’t come into effect until late next year on 5 October 2021, despite the financial watchdog acknowledging the current 45 day timeframe is no longer appropriate.
“In our view, the 45 calendar day IDR timeframe for standard complaints was no longer appropriately balancing the interests of industry and consumers,” the regulator wrote in its report, ‘Maximum timeframes for internal dispute resolution’.
Ms Chester said the delay was brought about by the COVID-19 coronavirus and that the time will help get the changes up and running.
“While this extended timeframe reflects the impacts of COVID 19, publishing (the guidance) RG 271 now gives affected firms certainty and enough time to make systems and other changes necessary to meet the updated regulatory guidance,” she said.
The updated guidelines generally:
- reduce how long banks have to deal with complaints
- dictate what information should be featured so they can be escalated
- spell out what’ll happen to representatives who don’t act in the best interest of customers
It’s estimated most standard complaints are already dealt within the 30 day timeframe. Data on how banks deal with internal complaints is spotty, ASIC said, and so they estimated banks deal with about 5 million complaints a year at most.
Just more than 420,000 complaints take longer than 30 days to fix, ASIC estimates. The people waiting for an outcome on these cases maystand to benefit from the revised guidelines.
Adjacent industries will also have to follow revised guidelines from late next year. Superannuation companies, for instance, will have to resolve complaints within 45 days -- compared to the current 90 day expectation.
Among the most powerful ways to express dissatisfaction with a bank is to take your business elsewhere. Not only would it send a clear message, but it may also lead to you finding a better savings rate or an account with fewer fees. There’s no shortage of banks offering savings accounts and you can compare their offers here.
Customer rights were generally bolstered following 2017’s Royal Commission into the industry. A few years on and open banking is on the horizon, an initiative that gives people the authority to share their financial data with other firms. The idea is competitors eager for your business will tailor a solution that’s specific to how you spend and save money.
It’s still early days for open banking -- so far only two financial firms can receive data from the big four banks -- but another 70 have commenced the process of securing accreditation.