Starting 18 July 2024, the Financial Service Providers (Rules for Approved Dispute Resolution Schemes) Regulations 2024 introduce important changes:

• Increased compensation cap: All dispute resolution schemes (DRS) can now award lump sum compensation payments up to $500,000.
  
  
• Compensation scope: Compensation can be awarded for one of both of:
  
  
  • Direct loss suffered by the complainant as a result of the FAP’s conduct.
    
    
  • Direct expenses reasonably incurred by the complainant.
    
    
• Special compensation: Up to $10,000 +GST can be awarded for non-financial loss, stress humiliation, inconvenience, or loss of opportunity.
  
  
• Updated timeframes for complaint procedure:
  
  
  • Complainants must first file their complaint directly with the FAP.
    
    
  • If the FAP does not issue a final decision within two months, the complainant can then take the complaint to the DRS.
    
    
  • If a final decision is provided within two months and the complainant is unsatisfied, they have three months to escalate the compliant to the DRS.
    
    

Action steps for FAPs

• Review your complaints procedure: Check that your process meets the new timeframes and update your documentation accordingly.
  
  
• Resolve disputes proactively: Aim to settle issues internally before they escalate to your DRS.
  
  
• Assess compliance: Regularly check your compliance status and the quality of your advice to minimise major complaints.
  
  
• Train your staff: Educate your team on the new regulations and the importance of quickly identifying, recording, and resolving complaints.
  
  
• Invest in compliance: High quality compliance practices can reduce the risk of complaints and save you money in the long run.
  
  

Making sure your procedures follow the latest rules for handling complaints efficiently and transparently not only helps you steer clear of fines but also improves how well your business runs. If you need help getting compliant, just reach out—we’re here to support you!