Internal Dispute Resolution (IDR) process

The Australian Securities and Investments Commission (ASIC) commissioned qualitative and quantitative research towards the end of 2018 to explore and measure consumer experiences of the Internal Dispute Resolution (IDR) process across a range of financial service sectors.

This report presents the findings of the research, focusing on a broad consumer journey map through the IDR process and the obstacles many consumers encounter on their journey.

1. Initiating a complaint
2. The complainant journey
3. Common obstacles encountered

1. Initiating a complaint

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-- Approximately 3.2 million Australian adults considered making a complaint to a financial service provider in the preceding 12 months (considerers) and 1.5 million adults actually made a complaint (complainants). -- The major reasons for complaints were the same among considerers and complainants: almost half were about fees and charges (47%), a quarter about customer service issues (25%) and one-in-five about a decision made by the company (17%). -- Almost half (47%) of these considerers did not proceed with their complaint because they did not think it would make a difference. -- Nonetheless, almost one in five (19%) considerers expressed dissatisfaction to the firm in person, and a further 6% reported that they had messaged the company through social media.

2. The complainant journey

Individual consumer journeys were not always linear, as consumers could skip some steps, revisit old steps or simply withdraw a complaint at any stage. However, this is the typical consumer journey for IDR:

The journey through the IDR process with financial firms involved many barriers or obstacles for
consumers which had a significant impact on their stress levels, the effort required to navigate their
complaint and their overall satisfaction with the process.

• The discovery phase was the point at which an issue was discovered that lead to a complaint.
• The preparation phase refers to any activity that a complainant undertakes prior to making the first contact with their financial service provider. This can be as simple as looking up a phone number through to seeking advice from a professional. Most complainants (84%) reported undertaking some preparation prior to making a complaint.
• The first contact phase was when the complainant initially contacted the financial service
  provider to make a complaint. Almost all complainants (99%) made this initial contact themselves,
  with the remaining 1% having someone else make the complaint about them (e.g. a solicitor or
  family member). If the complaint was not concluded on the first contact, complainants moved into the holding pattern phase. At this point, complainants either waited for the financial service provider to conclude their complaint, contact them with an update, or actively followed up with the financial service provider. Of all complainants, 84% moved into the holding pattern phase.

Active follow up behaviours included contacting the financial service provider, sometimes on multiple occasions, to seek clarity on the progress of the complaint or to escalate the complaint to a more senior representative. Half (51%) of all complainants in the holding pattern engaged in at least one follow-up activity. The complainants who did not follow up (42%) may receive updates from the financial service provider, but they were not active in pursuing their complaint.

• After the holding pattern complainants reached the IDR conclusion phase, which meant that the complaint had been finalised by the provider (which may or may not have been to the satisfaction of the complainant). The quantitative survey found that 82% of complainants reached this phase, meaning that they did not withdraw or abandon their complaint.

3. Common obstacles encountered