AFCA extends complaint timeframes

AFCA have extended IDR timeframes in light of covid-19

Written on 22 April, 2020
Allyssa Hextell

AFCA have advised NIBA that that they have written to members advise the following change in process (effective immediately), recognising the extraordinary circumstances that we all find ourselves in due to COVID-19:

The post IDR refer back timeframe will now be 30 days, which provides an additional 9 days for complaints (where matters have not been through IDR members will still have the 45 days as before). The changes will operate for six months and will be reviewed and adjusted as appropriate.

AFCA Chief Executive Officer and Chief Ombudsman David Locke said AFCA is aware of the difficult circumstances financial firms and the community are facing, and the extension ensures all parties involved had sufficient time to work together to resolve the complaint.

“This extension allows financial firms more time to resolve disputes with their customers, without the need to come to AFCA for an external dispute resolution service.

“This recognises the pressure some parts of the financial services industry are under, with unprecedented levels of customer queries and financial hardship requests. It also gives consumers more realistic expectations about when they will get a response.

“Where the parties are unable to resolve complaints by themselves, the extension provides more time to do things like find the documentation required by AFCA.

“From a consumer perspective, it is important to note that if a financial difficulty case has been brought to AFCA, then in most cases, no enforcement action can be taken while the matter is with us.”

The changes are a temporary measure which AFCA anticipates will be in place for up to six months and will be reviewed and adjusted as appropriate. All internal dispute resolution refer back timeframes remain unchanged.

The update relates to the following AFCA Rules:

  • A.5.1 When AFCA receives a complaint, AFCA will notify the relevant Financial Firm in writing of the complaint.
  • A.5.2 AFCA will refer the complaint back to the Financial Firm and set a timeframe for the Financial Firm to either resolve the complaint or to provide its position in relation to the complaint. This opportunity will not normally be provided: a) if AFCA considers it appropriate to commence investigating or otherwise progressing the complaint immediately, or b) for a Superannuation Complaint relating to the payment of a death benefit.

The change is intended to allow more time for members to resolve complaints using their internal dispute resolution practices, and where that can’t be achieved, it will provide them with more time to consult and communicate with their customers, and to locate the necessary documentation and information needed for AFCA to consider the matter.

This is in addition to the extension AFCA has already granted to members for its initial case management stage (ICMN), which has also increased from 21 to 30 days.