Consultation begins for AFCA proposed rule changes

The Australian Financial Complaints Authority is opening public consultation on proposed changes to the rules that govern its work helping consumers and financial firms to resolve complaints. 

The proposed changes to its official Rules, and associated amendments to its Operational Guidelines, are largely designed to implement recommendations of the Treasury-led Independent Review of AFCA. 

“AFCA has a significant three-year program of work underway to implement the Independent Review recommendations,” Deputy Chief Ombudsman Dr June Smith said. “Our proposed Rules and Operational Guidelines changes are an important component of that program. 

“The aim is to ensure AFCA continues to deliver fair, independent, efficient and effective solutions for financial disputes,” Dr Smith said. 

Summary of proposed changes 

AFCA proposes changes to its Rules and Operational Guidelines in the following general areas, to address the Independent Review Report recommendations: 

1. The management of unreasonable and inappropriate conduct within the scheme, to strengthen AFCA’s ability to deliver procedural fairness under Recommendation 2, to manage the conduct of fee paid representatives who engage with the scheme under Recommendation 4, and to build greater efficiency and timeliness in complaint handling in response to Recommendation 5.
2. Dealing with complaints where an appropriate offer of settlement has been made or where issues in dispute have been previously settled. These changes respond to Recommendations 1, 2, 5 and 7 to ensure only unresolved issues in dispute are progressed and that matters do not progress to case management or decision status where appropriate offers of settlement have already been made.
3. Excluding complaints lodged by professional or sophisticated investors unless exceptions apply, as required by Recommendation 6.
4. To enhance the visibility, accessibility and performance of the Forward Looking Review mechanism, under Recommendation 9.
5. Clarity about the effect of AFCA determinations and how the slip rule works to ensure greater transparency and understanding of AFCA’s decision making under Recommendation 2. This is designed to ensure that complaints are finalised in a more timely and efficient manner under Recommendation 5.
6. Minor changes to definitions and language to update certain areas of the Rules arising from legislative change, to give greater clarity and transparency of the scheme’s operation overall.

The AFCA rules and Operating Guidelines are available at AFCA Rules and Guidelines | Australian Financial Complaints Authority. Consultation on the proposed changes closes on 22 May.