AFCA is here. Is your business ready?

Alex Burke,  Senior Writer,  No More Practice Education

The Australian Financial Complaints Authority is up and running as of November 1.

AFCA is the consolidated complaints entity borne out of the Financial Ombusdman Service, the Superannuation Complaints Tribunal and the Credits and Investments Ombudsman. As ASIC explained, it represents the "single scheme for all financial services, credit and superannuation complaints," and has "significantly enhanced monetary limits for most consumer and small business complaints."

 

What are the new limits?

Under AFCA's charter, consumer and small business complaints "about most financial products and services with a value of up to $1 million" can be awarded compensation up to $500,000. Small business and primary producer complaints about credit facilities up to $5 million in value can be awarded up to $1 million (small business) and $2 million (primary producer).

Finally, superannuation complaints of unlimited value can be addressed by AFCA.

 

What do licensees need to do?

If you're an AFCA member with a financial services or credit license, you must notify ASIC of your membership details by November 30. "This includes all former FOS and CIO members who have now joined AFCA," ASIC explained.

If this isn't done, late fees will apply.

 

What is ASIC planning?

ASIC recently said that once AFCA commences operation, it will "consult on new internal complaints handling requirements. For superannuation complaints, we will propose shorter timeframes for dealing with complaints and stronger obligations to provide reasons for decisions on complaints.”

You can read more about AFCA's operational guidelines here.


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