QBE Insurance (Australia) Limited (QBE) will make changes to its outsourcing of escalated complaints and dispute resolution after ASIC raised concerns about the manner in which it had outsourced complaint and dispute resolution to an external Australian law firm.
In particular, ASIC was concerned that some QBE customers were receiving written communication on the letterhead of a law firm (rather than QBE-branded letterhead), and that this could create a potential barrier for those customers to resolve their disputes as they could:
- feel intimidated and possibly dissuaded from pursuing their complaint; and
- feel the need to seek unnecessary and costly legal representation.
ASIC was also concerned that this practice was inconsistent with QBE's Australian financial services licence (AFSL) obligations in relation to dispute resolution as well as the Australian Standard for complaints handling.
In response to ASIC's concerns, QBE has agreed to ensure, by the end of March, that all future communication with customers (relating to escalated complaints and dispute resolution) is QBE-branded, even where QBE may have received assistance from a law firm in preparing the correspondence.
ASIC Deputy Chairman Peter Kell said, 'A consumer's ability to access free dispute resolution is an important part of the financial services system. While licensees can outsource their dispute resolution functions, it must be done in a way that is consistent with their licence requirements, ensures accessibility to customers and maintains a customer-focussed approach'.
ASIC acknowledges the co-operation of QBE in resolving this issue.
Background
QBE Insurance (Australia) Limited is an AFSL holder.
This issue was identified when QBE voluntarily provided ASIC with information relating to its outsourcing agreements.
ASIC has released previous guidance on licensees' requirements when outsourcing, including: