Original media release by ASIC (6/11/2023).
ASIC has commenced civil penalty proceedings in the Federal Court alleging Telstra Super failed to comply with internal dispute resolution requirements.
This is the first proceeding under this regime, which came into effect on 5 October 2021.
The new regime makes certain provisions of ASIC’s Regulatory Guide for Internal Dispute Resolution (RG 271) enforceable, including the requirement to respond to most superannuation complaints within 45 days.
ASIC alleges that 40% of Telstra Super’s responses to complainants during the relevant period did not comply with its own dispute resolution procedures, which included 106 complainants who were not responded to within the applicable 45-day timeframe.
ASIC alleges that between 22 October 2021 and 13 January 2023, Telstra Super received 337 superannuation complaints but 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; and
- inform 22 complainants about their right to take their compliant to AFCA.
ASIC Deputy Chair Sarah Court said, ‘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. Financial service providers need to prioritise dispute resolution procedures to properly protect consumers.’
ASIC further alleges that Telstra Super failed to operate efficiently, honestly and fairly when it failed to comply with its procedures, sent delay notifications to complainants when it was not justified to do so, and did not have adequate resources to comply with its internal dispute resolution procedures.
Complaints to a superannuation trustee can cover a range of issues, from members who were inconvenienced by confusing information, to more serious complaints that result in financial harm, such as delayed or reduced payments or investments being made incorrectly.
ASIC is seeking declarations, pecuniary penalties and other orders against Telstra Super.
The date for the first case management hearing is yet to be scheduled.
Telstra Super Pty Ltd is trustee of the Telstra Superannuation Scheme, a fund with 91,361 members and over $23 billion in funds under management as at 30 June 2022.
ASIC’s guidance regarding internal dispute obligations is set out in ASIC’s Regulatory Guide 271 Internal dispute resolution (RG 271).
In December 2022, ASIC gave notice to Superannuation trustees to improve their internal dispute resolution systems and outlined ASIC would consider regulatory action where it held serious concerns (22-347MR).
ASIC’s Moneysmart website features information to support Australian consumers when making financial decisions. Find out more about how to complain if you are unhappy with a product or service.
The Australian Financial Complaints Authority (AFCA) independently assists consumers and small businesses to make and resolve complaints about financial firms.
* The figures in this media release and Concise Statement refer to specific areas of non-compliance that ASIC is alleging as part of its case. Some complaints have more than one issue. ASIC alleges that 40% of the complaints from the relevant period show at least one area of non-compliance.