ASIC v Telstra Super: accountability, but to what degree?

ASIC v Telstra Super Pty Ltd [2026] FCA 527 9 min read

The Australian Securities and Investments Commission (ASIC) has declared that the Federal Court has held Telstra Super 'accountable' for its failures to manage complaints properly (or, to use the technical language, that it failed to comply with its 'internal dispute resolution procedures' or 'IDR procedure'), stating that 'financial service providers must invest in robust systems and devote adequate resources to ensure complaints are managed promptly and fairly'.

A closer read of the Federal Court's judgment suggests some slightly more nuanced takeaways. In particular, ASIC was not successful in establishing a significant part of its case—namely, that Telstra Super failed to resource its IDR procedure so that it operated fairly, effectively and efficiently, or that it failed to do all things necessary to ensure it provided its financial services efficiently, honestly and fairly.

This Insight gives an overview of the wins and losses traded by ASIC and Telstra Super in the judgment, as well as a number of important practical takeaways for superannuation trustees (and financial services licensees more generally).

Key takeaways

• Five business day exception: to rely on the five business day exception, firms must regard a complaint as actually having been 'closed' by the relevant date. This should be supported through contemporaneous record-keeping in a firm's IDR system.
• No reasonable opportunity exception: firms cannot send IDR delay notifications as a matter of practice without first establishing one of the relevant circumstances to send a delay notification. Issues such as staff performance or other internal capacity constraints may be insufficient to constitute circumstances beyond a firm's control.
• AFCA information: firms should ensure their IDR responses and delay notifications inform complainants of their right to take their complaints to the Australian Financial Complaints Authority (AFCA) and include AFCA's contact details. This is the case even if the complainant has already gone to AFCA.
• Reasons for delays: an IDR delay notification needs to include enough detail to allow a complainant to understand the reason for the delay (ie why a firm has had no reasonable opportunity to provide the response within the required timeframe). It is not enough to simply state that investigations are ongoing.
• Efficiently, honestly and fairly: the obligation on firms is forward-looking and does not require a standard of perfection. Firms should ensure they have appropriate systems and resources to support compliance with their obligations, are continually monitoring and reporting on their compliance internally, and taking suitable remedial action with sufficient urgency where a compliance issue is identified.
• Regulatory focus: ASIC has flagged that it is continuing to focus on how superannuation trustees use complaints data to identify and address systemic issues. Its focus includes testing compliance with RG 271.

Background

The case, initially commenced by ASIC in November 2023, represents the first proceeding brought under the new IDR scheme, which makes certain provisions of ASIC's Regulatory Guide for Internal Dispute Resolution (RG 271) enforceable.

ASIC alleged that across 323 complaints Telstra Super received between October 2021 and January 2023, it committed a total of 204 breaches of its IDR procedure across 125 complaints. That is, just under 40% of the complaints received by Telstra during the relevant period were affected by some non-compliance. ASIC alleged that Telstra Super's shortcomings stemmed, in large part, from its overarching failure to commit adequate resources to its complaints handling function.

ASIC's case was twofold: first, it alleged specific contraventions of Telstra Super's IDR procedure; and, second, it alleged contraventions of Telstra Super's obligation to ensure that its financial services were provided efficiently, honestly and fairly. Telstra Super admitted to a number of failures to comply with its IDR procedure, but otherwise denied the allegations.

Allegation one: Failure to comply with Telstra Super's IDR procedure

The allegation that Telstra Super failed to comply with its IDR procedure had three key aspects—that it failed to:

• provide an 'IDR response' within the required 45-day timeframe (RG 271.56);
• comply with the content requirements for IDR responses and 'IDR delay notifications' (RG 271.53, 271.66); and
• adequately resource its IDR process so that it operated fairly, effectively and efficiently (RG 271.142).

1.1 Failure to provide an IDR response within the required timeframe

ASIC's claim centred on Telstra Super having either: not sent an IDR response within 45 days where an IDR delay notification was not provided; or provided a defective IDR delay notification (either due to the delay notification having been sent after the relevant 45-day period or the relevant circumstances to send a delay notification not existing).

Telstra Super sought to rely on two key exceptions: the five business day exception, and the no reasonable opportunity exception.

Both of these arguments were rejected by the Court. Importantly however, the Court noted that where a defective IDR delay notification was provided, this did not constitute a separate contravention in addition to Telstra Super's failure to provide an IDR response within the required 45 days.

1.2 Failures to comply with content requirements

ASIC's allegation that Telstra Super failed to comply with the content requirements for IDR responses and delay notifications had two aspects:

• Telstra Super failed to inform complainants about their right to take the complaint to AFCA, or failed to include AFCA's contact details in the IDR response; and
• Telstra Super's IDR delay notifications failed to inform complainants of the reasons for the relevant delay, as required under RG 271.66.

In relation to the first aspect of the allegation, Telstra Super argued that a number of the complaints related to complainants who had already gone to AFCA, and who AFCA had subsequently referred to Telstra Super. The Court rejected Telstra Super's argument that this constituted an 'implied exception', stating that the content requirements for IDR responses and delay notifications were clear and mandatory.

In relation to the second aspect of the allegation, Telstra Super used language to the effect of the following: 'the investigation into the cause of your complaint is ongoing'. While wary of being prescriptive of the level of detail required, the Court held that the reasons must disclose enough information to enable a complainant to understand the basis on which the condition for providing the delay notification was satisfied (ie the basis on which Telstra Super had no reasonable opportunity to provide the IDR response within the required timeframe). The Court was therefore not satisfied that Telstra Super's language was sufficient.

In rejecting each of these arguments, the Court again observed that these did not constitute separate contraventions (in addition to Telstra Super's failure to provide an IDR response within the required timeframe).¹  

1.3 Failures to adequately resource its IDR process

Under RG 271.142, a firm must resource its IDR process so that it 'operates fairly, effectively and efficiently'. In construing the nature of the obligation, the court drew a number of parallels with the broader obligation to provide financial services 'efficiently, honestly and fairly', stating that an IDR process is fair, effective and efficient when it involves the 'just and timely resolution of complaints, avoiding unnecessary delays or complexity'.

The key thrust of ASIC's claim was that Telstra Super failed to scale up its complaints team adequately with the increase in complaints. ASIC claimed that the complaints team required at least four members and pointed to the fact that overdue responses decreased after October 2022, when four staff were engaged. ASIC alleged that Telstra Super's repeated non-compliance with the IDR requirements showed that its IDR process was not operating fairly, effectively or efficiently, and that the contraventions arose from resourcing issues.

The Court conducted a detailed review of the steps taken by Telstra Super to prepare for the introduction of RG 271 and the steps taken after its implementation to address its ongoing compliance failures. In rejecting ASIC's claim, the Court noted the following:

• ASIC failed to call any expert evidence or to identify what Telstra Super should have done, beyond asserting that Telstra Super did not scale up its resources adequately.
• Although overall complaint numbers remained higher than pre-RG 271 numbers, the numbers moved around each month and did not settle into a reliable or predictable pattern.
• Before the introduction of RG 271, Telstra Super considered the level of resourcing required and reasonably considered that it would have sufficient resources.
• Following the commencement of RG 271, Telstra Super routinely monitored complaint numbers, turned its mind to whether it had sufficient resources to meet the IDR requirements, and made decisions to increase the level of resourcing at a number of times during the relevant period. While ASIC sought to levy criticism against Telstra Super in failing to act sooner, the Court said that the monitoring undertaken by Telstra Super involved retrospective analysis and that it naturally took time for the recruitment of additional staff to reflect in the reduction in overdue complaints.
• Telstra Super encountered two significant and unforeseen challenges, being the unplanned absence of its most senior complaints officer, and the ongoing impact of the COVID-19 pandemic.
• Telstra Super was not required to comply with a standard of perfection. Rather, resourcing required it to balance the needs of ensuring there were sufficient resources to meet the IDR requirements, without burdening members with unnecessary cost.

Allegation two: efficiently, honestly, fairly

ASIC's case that Telstra Super failed to do all things necessary to ensure that it provided financial services efficiently, honestly and fairly relied on four matters: the extent of Telstra Super's non-compliance with the requirements of RG 271, the sending of IDR delay notifications without regard to whether the delay criteria was satisfied, the sending of IDR delay notifications when no work on the complaint had been recorded, and Telstra Super's alleged failure to have adequate staff resources.

The Court repeated a number of, now well-established, principles regarding the nature of the obligation imposed under section 912A(1)(a). In particular, the Court noted that:

• While a contravention of s912A(1)(a) does not require separate contraventions of law, such contraventions may reveal a lack of efficiency, honesty or fairness.
• The obligation is forward-looking. A contravention is established by determining what a firm should have done but failed to do so (rather than by reference only to the fact that past failures occurred).
• The phrase 'efficiently, honestly and fairly' is to be construed compendiously.
• The expression involves an assessment of reasonable expectations and reasonable standards of performance.
• The obligation does not impose a standard of perfection but, rather, a reasonable standard of performance. It requires systems to ensure that wrongful conduct does not occur systematically, and that suitable remedial action is taken with appropriate urgency when issues arise.

Notably, the Court highlighted that a number of the authorities ASIC sought to rely on involved materially different circumstances, or proceeded on agreed bases (including as to the facts, the legal characterisation of those facts, and the statutory contraventions that were alleged by ASIC).

In applying the principles identified above, the Court rejected ASIC's claim and repeated many of the observations noted above regarding ASIC's resourcing claim. In particular, the Court noted the steps taken by Telstra Super in preparation for the introduction of RG 271, and then following its introduction, to continually monitor the handling of complaints and to increase the level of resourcing at various times during the relevant period.

While the noting that the existence of contraventions could be an indicator that Telstra Super's IDR process was not operating efficiently, honestly and fairly, the Court said that the contraventions that had been admitted or established were less extensive than those alleged by ASIC. Considering the forward-looking nature of the obligation, and the fact that the obligation does not impose a standard of perfection, the Court ultimately determined that Telstra Super's contraventions were not 'sufficiently serious departures' from a reasonable standard of performance to amount to contraventions of s912A(1)(a).

Validity of Complaints Instrument

It is worth noting that Telstra Super also challenged the validity of certain aspects of the ASIC Corporations, Credit and Superannuation (Internal Dispute Resolution) Instrument 2020/98. In particular, Telstra Super was concerned with s7(1) of the Instrument, which inserts sub-para (ia) to 912A(1)(g) and requires financial services licensees to comply with its IDR procedure. A contravention of this constitutes the contravention of a civil penalty provision.

The Court rejected Telstra Super's arguments, holding that s7(1) of the Instrument was a valid exercise of the power granted to ASIC under s926A, noting that ASIC was granted wide delegated legislative power, which included the power to alter the operation of the relevant part of the Corporations Act 2001 (Cth).