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ASIC consults on consumer remediation draft guide

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The corporate regulator is inviting feedback on draft guidance aimed at faster remediation of consumers in insurance and banking.

The Australian Securities and Investments Commission (ASIC) released the draft of its updated and expanded regulatory guide to consult on the way licensees should conduct remediations to return money owed to consumers.

ASIC says it is monitoring 64 remediations that will see the return of about $5.4 billion to more than 5.6 million consumers. Many other remediations are dealt with by firms without any ASIC involvement.

“Recent experience has shown that poor conduct has significant financial implications for companies, their investors, and ultimately their customers. This is demonstrated by the costly lag and drag of remediation and reputational damage,” ASIC Deputy Chair Karen Chester said.

“Licensees must do better at identifying and remediating problems earlier.”

The guidance has been expanded to cover all financial services licensees, credit licensees and retirement service providers and sets out how they should act to ensure their remediations are conducted efficiently, honestly and fairly, Ms Chester says.

The new “Consumer remediation: Further consultation” draft makes allowance for licensees to tailor it to the circumstances of their particular remediation. ASIC received 31 submissions in response to an earlier draft and has incorporated additional examples into the new draft as requested to give greater clarity.

Proactive remediation upon discovery of misconduct or other failures is necessary for licensees to comply with their licensing obligations, ASIC says.

See the new draft guide here. Feedback should be sent by February 11 to remediation@asic.gov.au.