Source : THE AGE NEWS
When the corporate regulator launched unprecedented legal action against one of the country’s largest superannuation funds, lawyers and consumer advocates breathed a sigh of relief, confident it would mark a significant turning point for improved customer service.
Six months on, they’re “banging [their] heads up against a brick wall”.
Superannuation lawyers and consumer advocates say the issues that ASIC has been calling out in the industry as far back as three years ago persist.Credit: Louie Douvis
Melissa O’Neill, a disability insurance and superannuation special counsel at Shine Lawyers, says little has changed since the Australian Securities and Investments Commission sued Cbus for taking too long to process the death and disability claims of 10,000 members.
“We’re just seeing the same old thing happening day in, day out,” O’Neill said.
“Unfortunately despite what ASIC is doing, and I applaud the efforts of ASIC in doing what they’re doing with both Cbus and Australian Super, but I would have thought that this would send a very strong message to [the industry] that their members are their number one priority, but it just doesn’t seem to be happening.”
Since ASIC’s high-profile Federal Court action against Cbus six months ago, the corporate regulator has sued AustralianSuper over similar alleged failures and recently released a report excoriating the entire sector for its poor handling of death benefit claims that left vulnerable Australians worse off.
O’Neill said the issues that ASIC had been calling out as far back as three years ago persist.
Recently, a client of hers with a terminal illness unnecessarily waited two weeks for their fund to lodge a claim with the insurer; another was told their claim had not been assessed because there was a “staff shortage” and also due to the “upcoming Easter holiday”; a separate client was told their claim could not be lodged with the insurer because they needed a second doctor’s report despite being handed a copy eight weeks earlier.
She said her emails and applications marked as urgent, including for her clients who are terminally ill, are routinely ignored.
“I just think that super funds don’t prioritise putting resources into their systems and processes for these people,” O’Neill said. “It just feels like we’re banging our heads up against a brick wall time and time again, and it appears to us from the outside that there is a culture of don’t know, don’t care, not interested.”
Super Consumers Australia chief executive Xavier O’Halloran thought the superannuation industry would improve markedly after the regulator sued Cbus. Credit: Rhett Wyman
Five weeks ago, ASIC released a landmark report examining super funds’ handling of death benefit claims and found “claims processes and procedures were often unclear and inconsistent”, and that “communication and engagement was often ineffective and insensitive”.
However, the regulator said during its review, that funds were “reassessing their claims handling communications and practices, and considering what changes need to be made to improve claimant outcomes”. Of the 10 trustees it examined, ASIC identified priority areas for improvement and found the vast majority had made progress.
“The reviewed trustees have already taken meaningful steps to improve the claims handling experience for future claimants, and planned future measures should continue to drive better claims experiences,” ASIC’s report found.
The Association of Superannuation Funds of Australia, which represents industry funds, said the industry had been working on delivering on more complicated improvements included in ASIC’s 34 recommendations.
“We take heart from complaints data from the Australian Financial Complaints Authority, which shows complaints about death benefits claims handling delays have dropped significantly in the two most recent quarters,” an ASFA spokesman said.
“The superannuation sector knows it has more to do and is committed to getting this right.”
Super Consumers Australia chief executive Xavier O’Halloran criticised the improvements made by the industry as taking steps “around the edges”, and said that a mandatory customer service standard was required.
“This has been on the card for years – not just the last six months [since ASIC’s case against Cbus],” he said.
“There have been constant complaints raised about the way claims processing is working. We saw the assistant treasurer raise concerns about customer service three years ago with the funds, and that’s why he decided to announce mandatory customer service because he wasn’t convinced in the subsequent two years there had been any improvements.”
The Financial Services Council, which represents retail funds, says its standards require member funds to annually attest compliance, which includes clear timelines for considering and resolving consumer claims. The council’s policy director, Chaneg Torres, said funds should prioritise increasing investment to improving their customer service.
“In moments of grieving and high stress, consumers should be able to expect their superannuation fund can at least give them peace of mind that the necessary administration of death benefits will be looked after as efficiently as possible, and claims will be paid in a timely manner,” Torres said.
“Recent scandals in the handling of group life insurance claims have understandably shaken consumers’ confidence.”
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