Systemic issues and serious misconduct

Our role as a dispute resolution scheme approved by the Australian Securities and Investments Commission (ASIC) and recognised by the Office of the Australian Information Commissioner (OAIC) involves reporting systemic issues and serious misconduct which we identify when investigating complaints. 
 
Broadly speaking, we classify these as follows.
 
Systemic issues
 
These are issues that have potential implications for persons beyond the immediate parties to a complaint (including other instances where the conduct of a financial services provider (FSP) has caused financial loss, or could result in a loss of consumer confidence in the FSP’s products and services). 
 
We may identify a systemic issue from dealing with a single complaint (for example, where a standard form contract fails to disclose a fee that the consumer is paying). Alternatively, we may do so after receiving a number of complaints containing similar claims (for example, where an Australian financial services licensee’s representative has advised consumers to acquire the same complex/high risk financial product, irrespective of the consumers’ differing goals and objectives).
 
Serious misconduct
 
This can include fraud, unconscionable or grossly negligent conduct, or a failure to act honestly, efficiently and fairly. We also consider that it extends to a FSP’s compliance with its obligations under the CIO Rules, including providing information and documents within the time specified, as well as staying enforcement action until we finish dealing with a complaint. 
 
  • We aim to work collaboratively and effectively with FSPs in addressing these matters as and when they arise. In doing so, we strive to:
  • work with FSPs to improve industry practices,
     
  • ensure that consumers who have suffered financial loss (including those that may not have complained about the problem) are compensated appropriately,
     
  • prevent further loss to consumers,
     
  • eliminate or minimise the risk of the problem recurring, and
     
  • efficiently deal with multiple complaints about a single problem (where this occurs).


​How we deal with systemic issues and serious misconduct  

 

  1. Identify

    If, during our investigations, we come across an issue of concern, we make an initial assessment as to whether it could constitute a systemic issue or serious misconduct. We may ask the FSP to provide us with additional information to assist us in our assessment. 
     
  2. Refer

    If we form a view that the issue is a potential systemic issue or amounts to serious misconduct, we refer it to the FSP. We: 
     
  • write to the FSP informing it of our view and the information we have relied on,
  • ask it provide us with a report that details its response to the issue raised, and 
  • work with the FSP, as far as is practicable, to ensure that the issue is addressed.
  1. Report

    The FSP’s report detailing its response to the issue raised by us is forwarded to ASIC or, in relation to privacy-related issues, to the OAIC. We usually report systemic issues to ASIC on a de-identified basis (particularly where the FSP has addressed the issue satisfactorily). If, however, the FSP does not cooperate with us or does not address or adequately address the systemic issue to our satisfaction, we disclose their identity to ASIC. Serious misconduct is always reported on an identified basis.