Australian Financial Complaints Authority (AFCA) – What is it?

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On November 1, 2018 the Australian Financial Complaints Authority, or AFCA, commenced to receive complaints from consumers and small business.

What is the Australian Financial Complaints Authority (‘AFCA’)?

AFCA is not a government department or agency and is not a regulator of the financial services industry. AFCA are a not-for-profit company, limited by guarantee that is governed by a Board of Directors, which includes equal numbers of industry and consumer representatives.

AFCA is the new Ombudsman responsible for providing fair, independent and effective solutions for financial disputes by working with consumers, small business and the financial services sector. It replaced the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal (SCT).

All Australian financial services licensees, Australian credit licensees, authorised credit representatives and superannuation trustees are required to be a member of the Australian Financial Complaints Authority  under their financial services licence conditions, in accordance with ASIC Regulatory Guide RG 165. An example of the organisations that are members of AFCA are:

  • banks and other credit providers
  • financial planning firms
  • general insurers
  • insurance broking firms
  • life insurers
  • superannuation fund trustees,
  • retirement savings account (RSA) providers
  • stock broking firms
  • fund management companies.

AFCA considers complaints in relation to:

  • banking deposits and payments;
  • credit, finance and loans;
  • insurance;
  • investments and financial advice; and
  • superannuation.

When lodging a complaint, the following is necessary to consider:

  • identify the issue you want to complain about;
  • determine the loss, or type of loss, you have experienced;
  • provide copies of relevant documents which support your claim; and
  • if you are experiencing financial hardship, prepare and lodge a Statement of Financial Position.
  • decide what sort of outcome you want to achieve.

After lodging a complaint AFCA will then determine the approach proposed to resolve the complaint. This may involve the following:

AFCA providing a preliminary assessment verbally or in writing. A preliminary assessment includes:

  • an overview of the facts of the complaint
  • the issues raised in the complaint and our preliminary assessment of those issues
  • how we think the complaint should be resolved and why
  • when the parties must tell us whether they are willing to settle the complaint in line with our preliminary assessment.

If the parties cannot come to an agreement to resolve the issue and AFCA makes a decision some of the remedies AFCA can award have financial values and others not. Below are examples of possible remedies:

  • the payment of a sum of money
  • the forgiveness or variation of a debt
  • the release of security for debt
  • the repayment, waiver or variation of a fee or other amount paid to, or owing to, the financial firm or to its representative or agent including the variation in the applicable interest rate on a loan
  • the reinstatement, variation, rectification or setting aside of a contract
  • the meeting of a claim under an insurance policy by, for example, repairing, reinstating or replacing items of property
  • in the case of a complaint involving a privacy issue with an individual – that the financial firm should not repeat conduct on the basis that it constitutes an interference with the privacy of an individual or that the financial firm should correct, add to or delete information pertaining to the complainant
  • in relation to a default judgment, not enforcing the default judgment
  • in relation to privacy-related complaints, to make an order that is generally consistent with the declarations available to the Information Commissioner when they make a decision under section 52 of the Privacy Act
  • an apology.

Monetary limits for general complaints

Note: This text is reproduced, based or adapted from AFCA’s Operational Guidelines, with the source below:

AFCA Australian Financial Complaints Authority

(Source: Australian Financial Complaints Authority (2018). Operational Guidelines, ‘Monetary limits for general complaints’ p198. Retrieved from the AFCA guidelines website here)

When AFCA makes a decision, it is binding on the financial firms if the complainant accepts it. In the case you do not need legal representation to lodge a complaint with AFCA, however you can be legally represented if you choose at your cost.

How can FC Lawyers help with Australian Financial Complaints Authority (AFCA)?

  • giving you advice about your rights,
  • assist you in submitting your complaint ensuring that all your issues are identified and supported,
  • provide support and advice in negotiating a resolution with the other side
  • advising as to the outcome of AFCA’s decision
  • advising on any later legal proceedings against a financial institution.

Our team have assisted clients through the Australian Financial Complaints Authority complaint process. If you have an enquiry about a financial complaint, please contact our team at FC Lawyers.

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