There is a new complaints authority in town!
The AFCA will start hearing disputes no later than 1 November 2018 after its passage through parliament.
What is the AFCA?
AFCA is an amalgamation of the Financial Ombudsman Service (“FOS”), the Credit and Investments Ombudsman (“CIO”) and the Superannuation Complaints Tribunal (“SCT”). It is to be funded by members of the scheme. All financial firms will be required to be members of the AFCA scheme, such a superannuation funds and insurers.
The primary complaint regarding all schemes was the time delays being, on average, with FOS 54 days for a standard complaint with more complex cases being 154 days. The CIO is 118 days and the SCT being 796 days to a determination. This was primarily brought about by resourcing issues and a large backlog of complaints. The amalgamation will hopefully see a more streamlined process.
How will it be different ?
The AFCA will be an ombudsman style of complaint system, as opposed to a tribunal, like the former SCT. The aim is that complaints are to be resolved in a fair, efficient and timely manner. AFCA will not be amenable to Judicial Review other than an appeal to the Federal Court on questions of law.
As part of this legislation, there is an enhanced role given to ASIC. In part, this includes issuing directions and publishing data on internal dispute activity. This will assist consumers in assessing which organisations are having internal complaints made mostly and may assist in the decision to purchase a financial product.
The AFCA will have broader monetary jurisdictions than the former bodies allowing for a larger number of matters to be heard.
It will remain to be seen whether AFCA will have the desired effect to expedite external complaints in a fair manner and we await this introduction with excitement.
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