Why every firm has a process
RG 271 says financial firms must have a dispute resolution system made of two parts: an IDR procedure that meets the standards and requirements ASIC makes or approves, and membership of AFCA. ASIC says the standards and requirements in RG 271 are enforceable, and they apply to complaints a firm received on or after 5 October 2021.
The route, with ASIC’s clocks
- First
Raise it with the business
Moneysmart says the first step is always to contact the business, explain the problem and say how you would like it fixed. If a call or an email does not fix it, Moneysmart says to make a formal complaint in writing, which is known as internal dispute resolution, or IDR. ASIC’s guide to IDR, RG 271, adds that a consumer does not have to use the word ‘complaint’ or put it in writing for the firm’s IDR duties to apply.
- Within one business day
An acknowledgement
ASIC expects a firm to acknowledge each complaint promptly: within 24 hours or one business day of the complaint arriving, or otherwise as soon as it practicably can.
- Within 30 calendar days
The firm’s response
For a standard complaint, a financial firm must give its IDR response no later than 30 calendar days after it receives the complaint. Where the complaint involves a default notice, the credit provider must respond within 21 calendar days.
- After that
AFCA
If the response is unsatisfactory, or the firm does not respond in the time required, the National Debt Helpline says the matter can go to an external dispute resolution scheme. ASIC describes AFCA as a single dispute resolution scheme for financial services, which began operating on 1 November 2018.
When the complaint is about hardship
RG 271 tells credit providers to treat complaints about hardship notices, or about requests to postpone enforcement, as urgent. It sets a tighter timetable for them, summarised here from its Table 2.
| Step | Time limit |
|---|---|
| The credit provider asks for information it needs to decide | No later than 21 calendar days after receiving the complaint |
| The complainant provides that information | Within 21 calendar days of receiving the request |
| The credit provider responds once the information arrives | A further 21 calendar days |
| The credit provider responds if the information never arrives | 7 calendar days, once 21 days have passed since the request |
| Agreed terms are confirmed in writing | Within 30 calendar days of reaching agreement |
What AFCA does with a hardship complaint
AFCA describes its process for a financial hardship complaint in stages. It first passes the details to the financial firm and encourages it to contact you quickly to find a solution. If no agreement is reached, a case worker from its financial hardship team investigates. The case manager may arrange a conciliation conference, a discussion AFCA leads between you and the firm, and if that does not resolve it, or does not suit the complaint, AFCA can make a final decision. For a hardship complaint, AFCA says it will ask for a statement of financial position, setting out your finances and how you plan to repay the debt.
The National Debt Helpline explains what a decision means: it binds the creditor if you accept it, and if you do not, you can still go to court, subject to any time limits. It also says enforcement action stops while the scheme considers your dispute, and that a dispute can be lodged even after you have been sued, as long as judgment has not been given.
Who has to belong to AFCA
ASIC’s guide to the general conduct obligations lists AFCA membership among a credit licensee’s duties. ASIC says a credit representative must be a member too, unless it is authorised only for credit activities involving low cost credit contracts, other than collecting repayments, and an authorisation given to a representative without membership has no effect. The broker’s duties that a complaint may turn on are in a broker on a refinance, and the papers it must give are in the credit guide and the quote.
Beyond AFCA
Moneysmart says ASIC takes complaints about misconduct in the management of a company, its directors or officers, and that a community legal centre may give free legal advice to help with the complaints process. Its page on how to complain lists help for First Nations peoples through ASIC’s Indigenous Help Line and Mob Strong Debt Help.
The National Credit Code also lets a court reopen a credit contract, mortgage or guarantee that it is satisfied was unjust when it was entered into or changed, on the application of the debtor, mortgagor or guarantor. That is a court process. The National Debt Helpline says anyone receiving court notices or demands about a debt should get legal advice immediately, and Moneysmart says the same of a Statement of Claim.
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