Specifically, AFCA notes Commissioner Hayne’s recommendation and the Government’s response on the establishment of a compensation scheme of last resort.
“AFCA and its predecessor schemes have long advocated for the establishment of a compensation scheme of last resort,” said Mr Locke.
“A compensation scheme of last resort is a really important back-stop that ensures that people who have been the victims of misconduct, and lost out through no fault of their own can finally be properly compensated. We look forward to working with the government to implement this important reform,” Mr Locke continued.
AFCA was established on 1 November 2018 and is a one-stop-shop that consumers and small business owners can use free of charge, for fair, independent and effective solutions to their financial disputes.
“The announcement from the Government today that AFCA will now be able to consider some of the legacy disputes excluded by the predecessor schemes going back to 1 January 2008, means that many more people will be able to get access to justice and have their matters properly considered. This is a really positive step for consumers and we will be issuing guidance shortly to assist people to bring these disputes to us,” Mr Locke said.
AFCA also welcomes the Commissioner’s recommendation in respect of section 912A of the Corporations Act 2001, to require that Australian Financial Services Licence holders take reasonable steps to cooperate with AFCA in its resolution of complaints, by making available to AFCA all relevant documents and records relating to issues in dispute. This will enhance AFCA’s effectiveness as an independent external dispute resolution scheme for consumers and small businesses.
The Government announced that AFCA will also play an increased role in relation to remediation schemes that are run to compensate consumers. Mr Locke also welcomed this: “AFCA already has considerable experience of working on remediation schemes, and where we are involved at an early stage we are able to ensure that these are designed and implemented in a way that delivers fair outcomes for consumers. We welcome an increased role in this important work.”
AFCA will continue to work with our members to improve standards and minimise disputes, improving practices and achieving fair, timely outcomes for consumers and small businesses.
AFCA is firmly on the side of fairness and we believe that ensuring fair outcomes for consumers is a critical first step to rebuilding trust and confidence in financial services.
A full statement can be found on the AFCA website: https://www.afca.org.au/news/
The Australian Financial Complaints Authority (AFCA) is a free and independent ombudsman service that resolves complaints by consumers and small businesses about financial firms. AFCA was established following the 2016 Ramsay Review into how Australia’s external dispute resolution framework could be improved to deliver effective outcomes for all Australian consumers and small business.
On 1 November 2018, AFCA replaced the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal as the one-stop-shop for financial dispute resolution. Consumers and small businesses can lodge a complaint to AFCA online at afca.org.au, via email to firstname.lastname@example.org or by phoning 1800 931 678.