AFCA – the new one-stop financial complaints shop
The Australian Financial Complaints Authority (AFCA), a one-stop shop complaints resolution service for the financial sector, will replace the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal (SCT) from 1 November 2018. Lawyer Laura McGill highlights what you need to know about the transition process.
- AFCA's primary objective is dealing with complaints about financial firms such as banks and credit providers and is free to all consumers.
- AFCA differs from previous external dispute resolution (EDR) schemes with higher monetary and compensation limits for consumer and small business complainants and a single point of contact for complainants seeking EDR services.
Financial firms (including existing members of CIO and FOS) need to become members of AFCA by 21 September 2018. Once membership is obtained, members must provide confirmation to ASIC.
Financial Ombudsman Service
FOS, being the largest EDR scheme, has transitioned to AFCA first allowing its membership base, employees and resources to form the foundation for the new scheme. FOS members should have already been contacted by email outlining the process for completing an annual membership assessment form for the 2018/2019 period, including a declaration to become a member of AFCA. Members who have completed those forms are not required to take any further action.
Members who have not completed their annual assessment will not be a member of AFCA.
Credit and Investments Ombudsman
On 7 August 2018, CIO started the process of notifying its current members about the process to secure their EDR membership with AFCA. Members are required to secure their AFCA membership by 21 September 2018.
Existing members of CIO, including licence holders, will be instructed by email to complete an annual assessment and member declaration to become an AFCA member, and authorised credit representatives will be directed to apply for membership.
Superannuation Complaints Tribunal
Superannuation trustees and entities can now complete an online membership application on the AFCA website.
Consumers can lodge complaints with existing EDR schemes until 31 October 2018 and AFCA will commence accepting complaints from 1 November 2018.
Complaints made under the existing schemes which remain unresolved at 1 November 2018 will be dealt with by AFCA under the rules and terms of reference that applied when the complaint was originally made.
The SCT will continue to resolve open complaints for a time after the commencement of AFCA and there will be no transfer of complaints between SCT and AFCA.
Our Commercial Disputes lawyers can help with any queries you have about the transition process and what you need to do next.