Retirement
1.7m Aussies backed away from financial disputes
ASIC is calling on the financial services industry to improve complaints practices, after it found half of all consumers who considered making a complaint to their financial firm did not proceed due to the hassle.
1.7m Aussies backed away from financial disputes
ASIC is calling on the financial services industry to improve complaints practices, after it found half of all consumers who considered making a complaint to their financial firm did not proceed due to the hassle.
According to research released yesterday by the corporate regulator, 17 per cent of Australians above the age of 18 considered making an internal complaint to their financial service provider over the past year.
Of that 17 per cent, only 8 per cent went on to make the complaint, with 1.7 million people, half of all “considerers”, not proceeding as they thought it wouldn’t make a difference or it was not worth the time and effort.
A further 18 per cent of those that proceeded with their complaint indicated they dropped it or withdrew from the process before it was resolved.
Through its research, ASIC found that consumers were met with a number of obstacles when making a complaint internally to financial service providers.
One in seven complainants said they found it hard to locate the firm’s contact details in order to make the complaint, while a quarter said the internal dispute resolution (IDR) process was not explained well to them upon first making contact.
Furthermore, 27 per cent of complainants were not clearly told how long they were required to wait for a decision, and 28 per cent felt they had not been listened to at all.
Twenty-two per cent also felt they had been passed around to too many consultants when making a complaint.
Less than half of those that complained and received an undesired outcome were given the reason for this decision.
Alongside this, only 21 per cent of complainants whose complaints were not resolved in the time frame set by ASIC were given explanation on how to pursue external dispute resolution.
“As the first step in the financial dispute resolution system, IDR plays a vitally important role in Australia’s consumer protection framework,” Danielle Press, ASIC commissioner said.
“Consumers and small businesses should have access to transparent, fair and timely complaints processes. Our research shows the strong connection between consumer satisfaction in how a firm deals with a problem and their confidence in that financial firm.”
“Making a complaint can be a stressful exercise for many people and there are clear opportunities for financial services firms to improve consumer experience and outcomes.”
She said the ASIC team would continue working to raise financial services IDR standards and transparency.
This includes the establishment of a specialist ASIC team to monitor and assess the IDR functions of NAB, CBA, Westpac, ANZ and AMP on-site; conducting a review of its existing IDR guidance, and ensuring financial firms deliver required regular reports on IDR performance data to the corporate regulator.
For consumers who have been unsuccessful in their attempts at IDR but wish to continue with their complaint, ASIC encourages contacting the newly established Australian Financial Complaints Authority (AFCA).
Since opening on 1 November, AFCA has already received 6,522 complaints from consumers and small businesses.
The majority of complaints submitted have regarded the decisions of financial firms made on behalf of the customer and/or service quality issues.
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