Australian Financial Complaints Authority’s rules for legacy complaints get ASIC approval

Australian Securities and Investments Commission (ASIC) has approved changes to the Australian Financial Complaints Authority (AFCA) Rules which expand AFCA’s remit.

The AFCA scheme will be expanded with regard to legacy complaints, that is, it will allow consumers and small businesses to file complaints about financial misconduct dating back to January 1, 2008. AFCA will be able to deal with certain complaints about conduct by current member financial firms, which AFCA, its predecessor schemes, courts, or tribunals have not previously dealt with.

AFCA’s new Rules require that an eligible legacy complaint:

• relates to a compulsory member of the AFCA scheme who is a member of the AFCA scheme at the time the complaint is made;
• is not an excluded complaint; and
• is made during the lodgment period, July 1, 2019 to June 30, 2020.

AFCA has welcomed ASIC’s announcement. From July 1, 2019, Australian consumers and small business will be able to lodge complaints with AFCA about the conduct of financial firms dating back to January 1, 2008.

Under the new rules, AFCA has a 12-month window to accept and investigate these complaints; which must not have been dealt with by AFCA, its predecessor schemes, courts, or tribunals.

AFCA, an external dispute resolution scheme, started operating on November 1, 2018. The body has taken over from the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal. AFCA operates with higher compensation limits than its predecessors — for consumers ($500,000), for small businesses ($1 million) and primary producers ($2 million).

Financial firms including AFS licensees that provide financial services to retail clients, credit licensees, most credit representatives, superannuation trustees and unlicensed product issuers are required by law to join AFCA.