1 May 2018
Media Release - #2018044, 2018

In the role of: Minister for Revenue and Financial Services [19 July 2016 - 28 August 2018]

Putting Consumers First: Australian Financial Complaints Authority Takes Shape

The new one-stop shop for financial complaints is taking shape, delivering on the Turnbull Government’s commitment to overhaul the external dispute resolution framework for financial disputes in Australia, providing consumers and small businesses with access to free, fast and binding dispute resolution.

The Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP, has today announced the authorisation of Australian Financial Complaints Limited to operate the Australian Financial Complaints Authority (AFCA), the new financial dispute resolution scheme.

“Consumers and small businesses across Australia will benefit from the establishment of the Australian Financial Complaints Authority,” said Minister O’Dwyer.

“AFCA will have expertise to deal with all disputes across the entire financial services industry, including superannuation and small business lending disputes.”

“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,” said Minister O’Dwyer.   

AFCA will commence 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.

Consumers will be able to lodge complaints with the existing industry ombudsman schemes – the Financial Ombudsman Service (FOS) and the Credit and Investments Ombudsman (CIO) – and the Superannuation Complaints Tribunal (SCT) until AFCA commences.

The SCT will continue to operate beyond AFCA’s commencement to resolve the existing complaints it has on hand. Complaints lodged with the SCT will not be transferred to AFCA. The Treasury has put together a fact sheet to assist people who have already lodged a complaint with SCT, or who are thinking about making a complaint in the future. The fact sheet is available for download.

Minister O’Dwyer announced that financial firms would be required to become members of AFCA by 21 September 2018. 

All Australian Financial Services Licensees, Australian Credit Licensees, superannuation trustees and other financial firms required to become members of AFCA by law will need to do so by no later than 21 September 2018. AFCA will, in the coming months, outline the process for applying for membership.

One of the first priorities of the AFCA Board will be to commence public consultation on the AFCA terms of reference (known as the AFCA Rules) and the scheme’s interim funding model.

The AFCA Board will continue to engage with the existing dispute resolution bodies to bring about a smooth transition to AFCA for consumers and financial firms. Further information on the transition will become available on the AFCA website, which will be released shortly.

“I would like to thank Dr Edey, Chair of the AFCA Transition Team, for his dedication and expertise, and for the extensive consultation he and the Team have undertaken with industry and consumer groups,” said Minister O’Dwyer.

Minister O’Dwyer also acknowledged the significant work undertaken by the Joint Working Group comprised of representatives from FOS and SCT, which was established to consider how the transition to a single dispute resolution body could be best achieved. Members of the Joint Working Group were part of the company that submitted the application to operate the AFCA scheme.

“I would, in particular, like to acknowledge the contribution made by Professor Michael Lavarch AO during his tenure as Chair of the FOS and the Joint Working Group. His leadership over an extended period has been instrumental in bringing about a smooth transition to AFCA.”

“I am also grateful for the leadership of Shane Tregillis, FOS CEO, and his team for their collaborative engagement with the AFCA Transition Team,” Minister O’Dwyer concluded.