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CHOICE and Superannuation Consumers' Centre response to ASIC internal dispute resolution consultation

Quotes attributable to Alan Kirkland, CEO - CHOICE

"While the Royal Commission has led to an ever-growing compensation bill for the banks, we should not require another royal commission before aggrieved customers receive compensation in the future. Financial firms needs to be much better at resolving complaints when they are first made, and this needs to be firmly regulated by ASIC."

"The Ramsay Review found that a lack of consistent data made it hard to assess how well internal dispute resolution was working - despite the fact that it is the primary way for consumers to seek redress in the financial system."

"By requiring banks and other financial firms to provide data on their internal dispute resolution, ASIC will be better equipped to monitor and regulate poor performance. Publishing this information will mean that consumers can make decisions about where to take their banking or insurance, based on how well firms are treating their customers. This should drive better dispute resolution at the first instance, so that less people have to go to AFCA or, even worse, the courts."

"Self-regulation of internal dispute resolution has clearly failed, so we welcome the proposal to introduce a formal legal requirement for firms to comply with dispute resolution processes."

Quotes attributable to Xavier O'Halloran, Acting Director - Superannuation Consumers' Centre at CHOICE

"The ASIC report proposes reducing the current maximum internal dispute resolution (IDR) timeframe for superannuation funds from 90 days to 45 days."

"The superannuation sector often claims it is exceptional, in this case it's the exceptionally long time they take to respond to a person's complaint. Under the voluntary code superannuation funds have given themselves a massive three months to respond to a complaint. This falls well below what the community expects and is yet another reason why we shouldn't be letting industry write their own rules."

"The voluntary code for the superannuation funds is not enforceable and has no oversight, so we can't even be sure super funds are even keeping these exceptionally loose promises to their members. The Hayne Royal Commission called for an overhaul of industry codes, as too often financial service providers were either making poor promises or breaking promises without repercussions. The best solution is let ASIC get on with protecting consumers and set standards in line with reasonable community expectations."

Media Contact: 0430 172 669, media@choice.com.au