ASIC sets new dispute resolution standards for unlicensed COI lenders
The Australian Securities and Investments Commission (ASIC) has released guidance to clarify dispute resolution requirements for unlicensed carried over instrument (COI) lenders.
Unlicensed COI lenders are defined as credit providers and lenders that will not be offering any new contracts, but will continue to have pre-existing contracts on or after 1 July, 2010.
Under the new National Consumer Credit regime, all registered and licensed credit providers must provide their customers free access to their internal dispute resolution (IDR) procedures for complaints handling and to an approved External Dispute Resolution (EDR) scheme.
Consumers will be able to make complaints via IDR about their lenders, even if the lender in question does not register with ASIC or hold an Australian credit licence.
Once a complaint is received, an unlicensed COI lender must be responsive to the complaint and their IDR system must handle it within the maximum timeframes and according to other requirements set out in relevant regulatory guides.
ASIC encourages all unlicensed COI lenders to join an external dispute resolution scheme — either the Financial Ombudsman Service or the Credit Ombudsman Service.
Changes have been made to regulatory guides 165 and 139 and class order 10/517.
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