“This guidance is about affording firms the certainty to just get on with remediation themselves in a fair and efficient way. It’s also about incentivising firms to deal with the legacy of underinvestment in systems,” she said.
“Boards today are more likely to be getting briefed on the progress of their remediation programs. Historically, that would not have been the case. So, it’s about accountability, and it’s about transparency.”
The guide released by ASIC added that firms must put consumers at the heart of all decisions and return them, as closely as possible, to the position they otherwise would have been in.
It also explicitly allows companies to give consumers the benefit of the doubt when making assumptions about claims of wrongdoing, which can make remediation more efficient and save the firm time and resources that would normally be associated with analysing all records and files.
The chief executive of advocacy body Consumer Action, Gerard Brody, said ASIC’s updated guidance should deliver more effective redress to people who have been mistreated, especially those who are experiencing vulnerability.
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“ASIC has listened to our calls to put the onus on industry to get on with fair and timely remediation—returning the money they owe to wronged customers—and this is good news,” he said.
“Businesses that are not regulated by ASIC, such as telcos or even car companies, should also apply these best-practice principles when required to conduct remediation.”
ASIC is still monitoring 36 remediation activities across superannuation, financial advice, credit and banking and insurance whereby $3.25 billion has been paid or offered to more than 3.4 million consumers.
“If you’ve done the wrong thing by consumers, putting them back to where they should be is uncontroversial. Not doing so wouldn’t pass the pub test,” said Chester.
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