Australian financial firms have to inform their clients about new dispute resolution body AFCA

Maria Nikolova

All members of the new external dispute resolution body need to ensure their customers are aware they can bring a complaint to AFCA.

There are less than three months left until the Australian Financial Complaints Authority (AFCA) – a new external dispute resolution body for the Australian financial services firms, commences its work and starts accepting complaints. AFCA is poised to start receiving and resolving disputes from November 1, 2018.

Hence, there are some requirements that AFCA members have to comply with.

Importantly, firms need to ensure their customers are aware they can bring a complaint to AFCA. From September 21, 2018 until AFCA commences on 1 November 2018, AFCA members must provide contact details of both AFCA and the relevant predecessor dispute resolution scheme (such as the Financial Ombudsman Service) in their internal dispute resolution (IDR) response letters and ‘delay letters’.

By July 1, 2019, members must also include AFCA’s contact details in their Financial Services Guide or Credit Guide and in other relevant disclosure documents.

The firms have to ensure that their IDR final response letters and ‘delay letters’ issued on or after September 21, 2018 and before November 1, 2018 include references to both the relevant predecessor EDR scheme (which will be able to receive complaints only up until 31 October 2018) and AFCA (which will be able to receive complaints on and after 1 November 2018).

The firms also have to ensure that such letters issued on or after February 1, 2019 include references to AFCA but not the predecessor EDR schemes. Letters issued between November 1, 2018 and February 1, 2019 may continue to include references to both the predecessor EDR scheme and AFCA, provided it is clear that only AFCA can receive complaints after November 1, 2018.

Below is an example of a recommended referring copy, as per AFCA’s website:

Regarding the two recent consultations – on the proposed Rules that will govern AFCA, and on the AFCA funding model, both have now closed. The AFCA Board has recently considered the feedback received and any further appropriate changes arising from the consultation. Following the Rules being submitted to ASIC for approval, the plan is to release the final Rules and details of the AFCA funding arrangements in September. The Rules and the funding model will commence on November 1, 2018.

The Rules concern topics such as the complaints AFCA can consider, the process it will follow to resolve complaints, remedies and compensation limits, reporting obligations, and the handling of systemic issues. AFCA received 34 submissions from industry organisations, consumer bodies and financial firms.

Let’s also note the recent AFCA funding model consultation. AFCA is required to ensure it has adequate funding to effectively manage the transition from the existing Ombudsman schemes and the Superannuation Complaints Tribunal, as well as its ongoing complaint resolution services. A total of 17 submissions from industry stakeholders have been received.

  • Read this next

    Retail FX

    Weekly Roundup: FX prop firms switch to cTrader, who moved $1.35B BTC?

    The foreign exchange and cryptocurrency markets are always active, and this past week was no exception. Stay ahead with a selection of essential stories and updates that matter most to market participants.

    Digital Assets

    Bitcoin breaks all records with a massive $1.347 billion transaction

    This transaction has surpassed previous records, setting a new benchmark for Bitcoin trades. Before this event, the largest Bitcoin transactions included a $1.1 billion trade in April 2020 involving 161,500 BTC, and other significant transactions ranging from $491 million to $1.033 billion throughout 2019 and 2020.

    Digital Assets

    Uniswap debuts Ethereum ‘uni.eth’ subdomains

    Decentralized exchange platform Uniswap has integrated Ethereum Name Service (ENS), allowing users to create human-readable domain names and cryptocurrency wallet addresses using .eth endings.

    Web3

    Magic Square Expands with TruePNL Acquisition

    Binance’s web3 app store, Magic Square, acquired token platform TruePNL in a cash deal this week for an undisclosed sum. The deal brings TruePNL’s infrastructure (excluding branding & token) under Magic Square’s wing. Initially seeking a partnership, Magic Square opted for a full acquisition.

    Crypto Insider

    The Future of Prediction Markets? Zeitgeist Launches Decentralized Court System

    Polkadot-powered prediction market protocol Zeitgeist has announced the launch of its latest innovation: a decentralized court system.

    Digital Assets

    Crypto exchange Kraken fires back at SEC lawsuit, claiming overreach

    Crypto exchange Kraken is pushing back against the U.S. Securities and Exchange Commission (SEC), seeking to toss out a lawsuit that accused the platform of operating without proper registration.

    Industry News

    Exness Named a Best Place to Work in 2024

     Global leader Exness, tops in retail trading volume, earns 2024 “Best Place to Work” award, cementing its employee-centric culture after three prior years of winning the Cyprus national title.

    Digital Assets

    Swan Bitcoin taps Bakkt for crypto offering in the US

    “We are thrilled to be taking this exciting step forward in our partnership with Swan. This is just the beginning of our collaboration, as we intend to explore further growth opportunities together in the future, including expansion into international markets.”

    Digital Assets

    Polkadot Awards Bifrost a 500,000 DOT Loan to Enhance Liquid Staking Adoption

    Bifrost, a leader in liquid staking solutions, has secured a 500,000 DOT loan from Polkadot’s treasury to expand the reach and utility of its vDOT product within the ecosystem.

    <