The planned start date of 1 July 2018 for the Australian Financial Complaints Authority (AFCA) is unrealistic, says ASFA.
The AFCA is a replacement for three existing complaints bodies, including the Superannuation Complaints Tribunal. Legislation to create ASFA is currently before the Parliament. At the same time Treasury has been consulting on its terms of reference, governance and funding arrangements, though only allowed two weeks for responses.
ASFA said the commencement date of 1 July 2018 is “unrealistic”, given the amount of work involved and the lack of final legislation.
“We consider that a measured commencement date would be no earlier than 1 January 2019,” said ASFA, in its submission.
“This would, in our view, more appropriately reflect the need to allow adequate time for passage of the legislation, authorisation of a company to operate the AFCA scheme, development and finalisation of the terms of reference for the AFCA scheme and the ASIC regulatory requirements, and all necessary establishment activities.”
ASFA says that AFCA will reduce the consumer protections for superannuation products. Currently consumers can seek judicial review of SCT decisions where the Tribunal may have erred in ruling a complaint was outside its jurisdiction, or disagreed with a decision to treat a complaint as withdrawn. However, as the AFCA is not a statutory body, this avenue of review will not longer be available.
“We recommended that this be mitigated by providing the parties to a complaint with a specific right of review, for example by a panel within AFCA,” said ASFA.
ASFA also has “significant reservations” about allowing complainants to withdraw a complaint before the SCT and submit it to the AFCA, saying this creates the “potential for forum shopping”.
“ASFA recommends that any ability to withdraw a complaint from the SCT and then commence a complaint dealing with identical facts and subject matter before the AFCA scheme is limited to those complaints that the SCT had received but not yet commenced to consider.”