What Does RG 271 Mean for You?

The Australian Securities and Investments Commission’s Regulatory Guide 271 (RG 271) is the most prescriptive, not to mention enforceable, complaints guidance to come out of ASIC to date, extending the reach of RG 165 considerably. The new rules set out exactly what must be included in Internal Dispute Resolution (IDR) processes, giving businesses until October 2021 to comply.

RG 271 is intended to stimulate trust in the financial services sector with the overarching aim of driving fair and timely complaint outcomes for consumers and sharpening the focus on addressing any systemic issues in the industry.  Regulators are trying to make complaint handling performance effective, transparent and accountable.

But how will this impact businesses on a daily basis?

Who does RG 271 apply to?

The new guidance broadens its reach beyond all Australian financial service (AFS) licensees, Superannuation trustees, Australian credit licensees and credit representatives. Financial technology businesses, unlicensed product issuers and unlicensed secondary sellers are on the list now, too. RG 271 mandates exactly what IDR processes need to be in place for all of these businesses.

Which complaints does RG 271 cover?

The scope of the term ‘complaint’ is a major change introduced by RG 271. Businesses can’t pick and choose what they do and don’t consider to be complaints anymore. Complaints don’t have to include the actual word ‘complaint’ under RG 271, so it could be something as innocuous as a customer expressing dissatisfaction via social media. RG 271 stipulates that ALL complaints are to be recorded and dealt with, as long as the author is both identifiable and contactable.

Does it impact current timeframes for complaint handling?

In short, yes. Acknowledgement of receipt of a complaint within 24 hours or one business day is now mandatory, with firms required to take into account any preferred method of communication the complainant has indicated. The new guidance is very specific when it comes to issuing IDR responses based on the type of complaint. For example, businesses must now provide an IDR response to a standard complaint within 30 calendar days of receiving the complaint (down from 45 days under RG 165), a timeframe that stretches to 45 days for Superannuation trustee complaints (down from 90 days previously).

The guide makes clear that the final outcome (either confirmation of actions taken by the firm to resolve the complaint or reasons for rejection or partial rejection of the complaint) as well as the complainant’s right to escalate to the Australian Financial Complaints Authority (AFCA) if they are dissatisfied, must be communicated to the complainant as part of the IDR response.

It’s no longer down to the business to decide if the complaint has been resolved. Firms now have a duty to confirm with a complainant before marking a case as resolved and, in certain circumstances, will still need to provide a written IDR response, even if it’s within the initial five days.

Is there any guidance regarding vulnerable customers?

RG 271 requires that businesses have the ways and means to identify any customers who need additional assistance, taking into account their particular needs and dealing with these accordingly. There’s also a requirement to resource complaints effectively, with ongoing reviews of the adequacy of IDR resources a necessity to ensure RG 271 compliance.

What about reporting?

Complaint-related reporting was a suggested best practice under RG 165 but there were no specific requirements in place. Firms are now told what exactly they should be reporting on in RG 271, including the number of complaints received, the nature of complaints, complaint outcomes, any possible systemic issues that have been identified and any complaint trends that are evident.

Who’s responsible for compliance?

RG 271 requires clear accountabilities for the complaint-handling function to be in place as well as in-depth, board-level visibility of complaints. This goes hand-in-hand with an IDR system that’s able to help readily identify and resolve systemic issues. Regular and ongoing quality assurance processes are required, with the guidance specifying what should be monitored. This includes ensuring that all complaints are being recorded and that all complaint outcomes are fair. Compliance audits are to be undertaken at least once a year, with prescribed follow-up actions to be taken where non-compliance is identified.

RG 271 is tightening up how financial services organisations deal with complaints. Businesses who start to address these requirements now should be perfectly placed to hit the ground running by October 2021. To support this, we’ve created this free, easy-to-use online tool designed to provide organisations with a clearer understanding of their level of compliance with new regulations.

For more information on how Respond can help your organisation get ready to meet the RG 271 requirements, contact us now.