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The Australian Financial Complaints Authority (AFCA) will be established as a free, binding dispute resolution service to hear financial complaints from consumers, small businesses and retail investors.
The Minister for Revenue and Financial Services, Kelly O’Dwyer, said the passage of the Treasury Laws Amendment (Putting Consumers First – Establishment of the Australian Financial Complaints Authority) Bill will give significantly more consumers and small businesses access to free, fast and binding dispute resolution.
The new authority will commence operation in the second half of 2018 and combines three oversight bodies – the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal (SCT) – into a ‘one-stop-shop’ and has the power to award redress above values currently permitted under the existing schemes.
“AFCA is a landmark reform that will overhaul how financial disputes are dealt with in Australia. It will operate under significantly higher monetary limits and compensation caps. This will provide considerably greater access to redress for consumers and small businesses, and in particular, farmers, who will have access to up to $2 million in compensation under the new AFCA scheme,” O’Dwyer said.
The Federal Government will provide $4.3 million to ASIC over four years from 2017-18, including capital of $0.9 million in 2017-18, to ensure the AFCA delivers an effective dispute resolution service.
The Bill will now move to the House of Representatives for final passage.
Australians customers in dispute with their bank, insurer, super fund or financial firm have lodged more than 80,000 complaints in the last 12 months
The Australian Financial Complaints Authority has strongly supported the addition of new product intervention power to ASIC's regulatory toolkit.
ASIC has welcomed the authorisation of a new single external dispute resolution (EDR) scheme for consumer and small business complaints: the Australian Financial Complaints Authority
AFCA will be established as a free, binding dispute resolution service to hear financial complaints from consumers, small businesses and retail investors.