ASIC has announced that its recent review of the remediation policies and procedures of some large financial institutions to assess their implementation of RG 277 identified gaps where some licensees’ policies and procedures were inconsistent with RG 277 and could lead to poor outcomes for customers.
ASIC has called on Australian financial services and credit licensees to ensure they remediate affected customers quickly and fairly, in line with ASIC’s guidance in Regulatory Guide 277 Consumer Remediation.
ASIC’s findings included:
- some policies included unnecessary approval processes in order for review periods to exceed a certain number of years.
- licensees did not always consider beneficial assumptions as a mechanism to enable efficient remediations.
- some licensees had pre-determined rates for specific products or scenarios which did not return the customer as closely as possible to the position they would have been in had the misconduct not occurred.
- in some cases, there were a predefined number of customer contact attempts, which may be insufficient.
- evidence of policies that could result in some cohorts of customers for whom the licensee has payment information, not receiving payments under $5.
- a general lack of focus on fairness in governance frameworks.
Under the FAR regime, accountable entities will need to nominate an accountable person responsible for oversight of remediation programs.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
