On 14 February 2018 the Australian Government passed a bill to amend the Corporations Act 2001 (Cth) and associated legislation to introduce Australian Financial Complaints Authority (AFCA). AFCA is a single dispute resolution framework to resolve disputes about financial products and services. AFCA will be a new “one-stop shop” replacing the Superannuation Complaints Tribunal (SCT), Financial Ombudsman Service (FOS) and Credit & Investments Ombudsman (CIO).
The new laws give effect to recommendations set out in the Ramsay Review to establish a single financial and superannuation complaint body. Along with several other consumer advocacy organisation, CCLSWA made key submissions to the Ramsay Review and supports this move to a single dispute resolution scheme which will provide consumers with easy access to independent, efficient and fair dispute resolution processes.
Key features of the new laws include:
- Financial services firms will be required to report their internal dispute resolution activities to ASIC
- ASIC will publish information about a financial services firm’s internal dispute resolution activities.
- Consumers will be able to access AFCA free of charge.
- AFCA determinations are binding on financial services firms.
- An increase in the monetary limits for complaints made to AFCA and the compensation AFCA may award.
- ASIC will have greater powers to regulate AFCA.
- It is expected that AFCA will begin taking complaints from 1 November 2018.
ASIC also welcomes the establishment of AFCA and you can read the ASIC media statement in full here.