The Australian Financial Complaints Authority (AFCA) is set to start accepting complaints from 1 November 2018.
Minister for Revenue and Financial Services Kelly O’Dwyer has authorised Australian Financial Complaints Limited to operate the AFCA. This is the latest step in starting the AFCA – which replaces three existing financial dispute bodies – following from the passage of legislation in February and the appointment of a Chair in March.
Minister O’Dwyer said the new ‘one-stop shop’ for financial complaints would give consumers and small business “access to free, fast and binding dispute resolution”.
“AFCA will have expertise to deal with all disputes across the entire financial services industry, including superannuation and small business lending disputes,” said Minister O’Dwyer.
“For the first time ever, consumers will be able to go to one place to resolve any kind of financial complaint, and the new AFCA scheme will operate under significantly higher monetary limits and compensation caps to boot.”
“Labor and the Greens sought to defeat these important reforms by moving amendments to exclude superannuation disputes from AFCA’s remit. If they had been successful, 70% of all superannuates who hold life insurance through their superannuation would not have benefited from the new one-stop-shop and significantly faster resolution of their complaint.”
Labor had said that rolling the Superannuation Complaints Tribunal (SCT) into AFCA reduces consumer protections. There are also concerns that the SCT lacks the budget to deal with remaining complaints.
AFCA will start accepting complaints from 1 November 2018. “This commencement date will allow AFCA sufficient time to put in place the necessary infrastructure and staff to be ready to receive complaints,” said the announcement by Minister O’Dwyer.
Parts of the superannuation industry had said the 1 July 2018 start date for AFCA was “unrealistic”, calling instead for the new Authority to start on 1 January 2019.
Australian Financial Services Licensees, Australian Credit Licensees and large superannuation fund trustees, along with some other financial firms, will be required to become members of AFCA by 21 September 2018. Minister O’Dwyer said AFCA would outline the process for applying for membership “in the coming months”.
Consumers will still be able to lodge complaints with the existing dispute resolution bodies until AFCA commences. The SCT will continue to operate, with complaints lodged with the Tribunal not transferred to AFCA.
Update: ASIC, which will oversee the AFCA, welcomed the authorisation of the new Authority.
ASIC said the AFCA will consult publicly on new AFCA rules, which will be subject to ASIC approval, and the interim AFCA funding model.
“ASIC recently consulted on changes to its policy guidance about oversight of AFCA. As part of this process ASIC sought feedback about the need for disclosure relief for financial firms in relation to the EDR [External Dispute Resolution] changes. We will announce our position on this soon.”