Corporate watchdog ASIC has published an updated and expanded regulatory guidance to help financial firms remediate their customers quickly and effectively.
“Our guidance puts the onus on industry to get on with fair and timely remediations – returning the money they owe to wronged consumers,” ASIC Deputy Chair Karen Chester said.
Regulatory Guide 277 Consumer remediation (RG 277) is underpinned by the legal obligation of AFS licensees and credit licensees to operate efficiently, honestly, and fairly. RG 277 draws on six years of ASIC’s oversight experience and has been subject to an extensive two-year public consultation process with consumer and industry stakeholders. The guide is comprehensive and allows licensees to scale and tailor their remediations to fit the circumstances.
“The release of our expanded guidance, along with the updated Making it right field guide, delivers licensees all they need to achieve the right remediation outcomes on their own,” Chester said. “It explicitly allows the use of assumptions, to help firms address knowledge gaps and accelerate remediation programs in a way that does not disadvantage consumers.”
The ASIC official said licensees must do better at identifying and remediating problems earlier to avoid the costly lag and drag of remediation.
“The common stumbling block we have seen across remediations is underinvestment in systems,” Chester said. “This underinvestment has led to a trifecta of failures. First and foremost, in delivering on promises to consumers, second in identifying the failures, and third in being able to remediate consumer loss in a timely way.”
Going forward, ASIC said that while it “may need to intervene in some isolated cases,” it expects the industry to apply the updated guidance to all new remediations “in order for consumers to receive fair and timely outcomes.”
ASIC has also released an updated version of Making it right: How to run a consumer centred remediation, a best-practice field guide that helps licensees with the day-to-day design and execution of consumer-centred remediations.
