The Australian Securities and Investments Commission (ASIC) is the body responsible for overseeing the operation of Australia’s financial services dispute resolution framework, including the internal dispute resolution (IDR) systems of superannuation trustees and other financial firms. Together with the Australian Financial Complaints Authority (AFCA), it forms the key consumer protection mechanism to ensure all complaints are resolved in a fair and timely manner.
Recently, to gauge the degree of superannuation trustees’ compliance with the IDR requirements, ASIC collected and analysed data from a selection of 35 trustees of 38 funds, covering 49,029 complaints received between October 2021 and February 2022. This initial surveillance found indicators of significant compliance issues and areas that need to be strengthened.
According to ASIC, 10% of the funds recorded significantly fewer complaints than the expected average, which may be a result of trustees either failing to record all member complaints or using an inappropriately narrow definition of “complaint”.
ASIC also reported concerns about the time super trustees take to respond to complaints, and failure by some trustees to notify complainants of delays and their rights to go to AFCA when a written response is not sent within 45 days. In fact, nearly 50% of complainants weren’t notified of delays or their rights, and one in three trustees advised ASIC of varying failures in their IDR processes, including failure to capture complaints, the omission of mandatory content from response letters or failure to send out responses to complainants.
In the next stage of its surveillance, ASIC will be checking how trustees are addressing the concerns identified thus far, and will closely examine a smaller subset of trustees. It will consider regulatory action where appropriate.