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From 1 November, finance companies will need to respond to complaints that have already been through an IDR process in 21 days, as the temporary extension comes to an end.
In April of this year, the Australian Financial Complaints Authority (AFCA) gave consumers, small businesses and financial firms extra time to respond to complaints that have already been through the firm’s internal dispute resolution (IDR) process.
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Due to the COVID-19 pandemic, financial firms were temporarily granted a nine-day extension to respond to notifications from AFCA that a complaint had been lodged. This expanded the time frame from 21 to 30 days.
This extension period will cease on 1 November 2020.
As such, AFCA is reminding firms that, after 11.59pm on 31 October, they will have 21 days to respond to financial difficulty complaints and complaints that have already been through IDR processes.
AFCA will also require initial responses to complaints that have reached the case management stage within the requested time frame (seven, 14 or 21 days as appropriate).
Speaking of the move, AFCA’s chief ombudsman and CEO, David Locke, commented: “AFCA has been working closely with key stakeholders since April to monitor and review the response time frame change, and it is appropriate that the extension ceases as intended at the six-month point.
“We are appreciative of the way our members have dealt proactively with the challenges of COVID-19 and the resolution of complaints during this extended response time frame.
“I congratulate our members for their high levels of responsiveness during this extended time period, and I am confident this high level of response will continue when the time frame reverts to 21 days.”
He continued: “AFCA will, of course, continue to consider further extensions where they’re needed on a case-by-case situation. This is part of our normal process.
“We understand that the damaging impacts of COVID-19 continue to be felt by some financial firms, as well as consumers and small businesses, and our approach is flexible and agile to meet these individual needs.”
Mr Locke “strongly urged” members who need more time to tell AFCA “early and regularly” so it can respond “appropriately”.
AFCA has also encouraged financial firms to “continue to work constructively and reasonably” with affected consumers and small businesses during any period of disruption, particularly consumers and small businesses in hardship, or who may be experiencing difficulty repaying debt.
“This includes openly and transparently communicating with consumers and small businesses about any delays financial firms may experience in decision making, claims or complaints handling caused by the impact of COVID-19 on their business,” the authority outlined.
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