The Australian Financial Complaints Authority (AFCA) is a new external dispute resolution (EDR) scheme to deal with complaints from consumers in the financial system.
It will be operated by a not-for-profit company limited by guarantee authorised by the responsible minister.
AFCA replaces the three existing EDR schemes of the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and Superannuation Complaints Tribunal (SCT) so that consumers have access to a single EDR scheme.
Membership of the company will be required under law or a licence condition of a financial firm. AFCA operations will be financed by contributions made by its members. The scheme will be free to consumers.
- be the single point of contact for complainants for EDR services
- have higher monetary limits
- be more accountable to users, including by having an independent assessor to deal with complaints about its handling of disputes
- have rules (terms of reference) to support its dispute resolution functions and legislation in the case of superannuation disputes.
ASIC has approved the AFCA Rules, which are effective for all complaints lodged with AFCA from 1 November 2018.
August – September 2018: Information about the AFCA dispute resolution process
September 2018: Release of final Rules
21 September 2018: Financial firms required to have joined AFCA
1 November 2018: AFCA operational and ready to receive complaints
Disclosure relief during transition period
ASIC has provided relief for financial firms and superannuation trustees, allowing them time to update mandatory disclosure documents in the lead up to the transition to AFCA, which commences operations on 1 November 2018.
The disclosure relief is conditional upon consumer communications about how to complain, including information on relevant websites, and documented internal dispute resolution (IDR) procedures being updated with AFCA’s details by 1 November 2018.
If this information is not updated by 1 November 2018, the transitional relief for updating disclosure documents, such as financial services guides (FSGs), with AFCA's details cannot be relied upon.
AFCA has guidance for AFCA members to ensure their clients are aware that they can bring a complaint to AFCA. It also sets out transitional arrangements for disclosure of AFCA contact details in final response letters.