On Monday, the Australian Securities and Investments Commission (ASIC) announced that it has commenced civil penalty proceedings in the Federal Court alleging that TelstraSuper has failed to comply with internal dispute resolution requirements.
ASIC alleges that 40 per cent of the super fund’s responses to complainants during the relevant period did not comply with its own dispute resolution procedures.
Between 22 October 2021 and 13 January 2023, TelstraSuper is said to have received some 337 super complaints. However, ASIC alleges that the fund failed to comply with notification requirements when it failed to:
- respond to 106 complainants within 45 days
- inform 85 complainants about why there was a delay in responding to their complaint
- inform 22 complainants about their right to take their complaint to AFCA
“ASIC expects the financial services industry to have effective dispute resolution procedures in place, and, importantly, to have the systems and resourcing to ensure they are being put into practice,” commented ASIC deputy chair Sarah Court.
“Financial service providers need to prioritise dispute resolution procedures to properly protect consumers.”
The regulator is seeking declarations, pecuniary penalties and other orders against TelstraSuper. The date for the first case management hearing is yet to be scheduled.
ASIC noted that this is the first proceeding since its updated internal dispute resolution requirements came into effect on 5 October 2021.
The new regime made certain provisions of Regulatory Guide 271 Internal dispute resolution (RG 271) enforceable, including the requirement to respond to most super complaints within 45 days.
In December last year, the regulator told a number of funds to take “prompt action” to improve their internal dispute resolution systems after a review found that some trustees had sub-standard arrangements for managing complaints.
As part of this review, approximately 20 per cent of super funds were found to have failed to consistently respond to complaints within the mandatory 45-day timelines.
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.