ASIC RG 271 internal dispute resolution: what AFS and credit licensees must do

What RG 271 is

ASIC Regulatory Guide 271 establishes the mandatory internal dispute resolution (IDR) standards that AFS licensees and credit licensees must adhere to. It is underpinned by ASIC Class Order [CO 14/923] and ASIC Corporations (Internal Dispute Resolution) Instrument 2020/98.

The Guide superseded ASIC Regulatory Guide 165 and became enforceable from 5 October 2021. It applies to a broad range of entities, including superannuation trustees and others.

RG 271 governs the handling of complaints, which are defined as any expression of dissatisfaction relating to products, services, staff, or the complaint-handling process itself, according to the AS/NZS 10002:2014 standard.

Maximum response timeframes

Licensees are required to respond to complaints within specific timeframes, as outlined in RG 271. Standard complaints generally require a response within 30 calendar days from the date the licensee receives the complaint.

Certain types of complaints have shorter response timeframes. Superannuation trustees and traditional trustee company services must respond within 45 calendar days. Credit-related complaints involving default notices or postponement of enforcement actions require a response within 21 days.

If a licensee is unable to respond to a complaint within the applicable timeframe, they must inform the complainant of the reasons for the delay and advise them of their right to escalate the matter to the Australian Financial Complaints Authority (AFCA).

IDR data reporting

Licensees are required to report internal dispute resolution (IDR) data to ASIC. This reporting obligation is being implemented through a phased rollout, commencing in 2022-2023.

The data reported includes information on complaint volumes, the products and services to which complaints relate, the outcomes of those complaints, and the timeframes involved in resolving them.

ASIC publishes this data in an aggregated, industry-level format.

The AFCA handoff

When a complaint cannot be resolved through a licensee’s internal dispute resolution (IDR) process within the maximum timeframe, a complainant has the right to escalate the matter to the Australian Financial Complaints Authority (AFCA). This represents a pathway for resolution outside of the licensee’s internal systems.

Licensees are obligated to inform complainants of this option. Any final IDR response that is unfavourable to the complainant must be accompanied by written reasons, alongside clear notification of the complainant’s right to take the complaint to AFCA. This ensures transparency and facilitates informed decision-making by the complainant. director duties self-check

AFCA’s determinations are legally binding on the licensee, up to specified monetary limits. This means licensees must comply with AFCA’s decisions within those limits.