Australia’s financial service providers need to improve their internal dispute resolution processes after a review found customers faced numerous “obstacles” when trying to make complaints.

ASIC is “concerned” with the way financial institutions are managing their internal dispute resolution (IDR) processes after its investigation into complaints handling found as much as 28 per cent of all complainants felt they “had not been listened to or heard”.

The review found that more than half of the people who considered making a formal complaint to their bank chose not to do so because they felt it either wouldn’t make a difference, or simply wouldn’t be worth the time it would take.

Most worryingly, though, was that only 21 per cent of customers whose complaints weren’t resolved in the timeframe assigned by ASIC were given an explanation of the external dispute resolution (EDR) process, which customers can turn to when they’re unsatisfied with the response they receive from their initial complaint.

“ASIC was particularly concerned about this finding since each of these steps is essential to assist consumers to effectively escalate their complaint to an independent and external forum,” the regulator said.

Customers not surprised

The findings are in line with expectations, according to one NAB customer who spoke to The New Daily about their own experiences making complaints.

P.J. had been dealing with a specific – immensely helpful – staff member, but the employee was unable to share his direct contact details with P.J. due to bank policy, and trying to reach him on the phone ate up hours at a time.

“You need to have been to the loo and have a snack handy,” she said of her calls to the bank.

Each time P.J. tried to speak with this staff member, she was faced with “inquisitorial” questions about her identity and case, and felt that all communication between herself and the bank had to be on their terms.

After this situation played out several times, and P.J. was still unable to get in touch with the person she had been dealing with, she lodged a formal complaint online.

Four days later, she’d still not received so much as an acknowledgment that her complaint has been received.

It’s not the only disappointing experience she’s had with the bank’s complaints process, and the restrictive time and financial cost of making a complaint has stopped her from making other complaints in the past.

“Given the current going rate for my employment, dealing with NAB on the phone can costs me hundreds,” she said.

More than 300 complaints a day

ASIC’s latest report comes only a week after the newly-created ‘one-stop shop’ complaints authority, AFCA, revealed it received 47 per cent more complaints in its first month of operation than the three organisations it replaced combined – roughly 310 complaints a day between its launch on November 1 and December 5.

While this is an increase on the number of complaints received by the previous EDR regimes, AFCA chief executive David Locke said it’s “on par with what [AFCA] were expecting”.

Banks were the most complained about financial service providers with 2367 complaints during AFCA’s first month – more than double the second-most complained about providers, general insurance companies, which received 1159 complaints.