Final countdown to launch of Australia’s new financial dispute resolution body begins
The Australian Financial Complaints Authority (AFCA) is opening for business as of November 1, 2018.
There are just several hours left before the official launch of the Australian Financial Complaints Authority (AFCA) – the new single dispute resolution body.
The new body is taking over from the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal.
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. Some other firms operating under a licensing exemption may also be required to join the Australian Financial Complaints Authority (AFCA), including firms operating in the regulatory sandbox. The firms should have done so by September 21, 2018.
In a joint media release, the Hon Josh Frydenberg MP, Treasurer, and the Hon Stuart Robert MP, Assistant Treasurer, noted that Australian consumers and small business will be spared the expense and inconvenience associated with taking financial complaints to court, thanks to the Australian Financial Complaints Authority (AFCA) which is opening for business as of Thursday, November 1, 2018.
This new one-stop shop aims to deliver free, fast and binding service for all financial complaints, whether they be related to banks, credit providers, insurance companies or superannuation funds.
Consumers and small businesses will benefit from having increased access to redress as AFCA will have significantly higher monetary limits and compensation caps than were available under the Financial Ombudsman Service (FOS) and Credit and Investments Ombudsman (CIO).
AFCA will be able to hear consumer complaints where the value of the dispute is less than $1 million and will be able to award compensation of up to $500,000. This will be almost double the exiting limits of FOS and CIO.
In the case of small business credit complaints, a small business will be able to have their complaint heard where it relates to a credit facility of less than $5 million and will be eligible for compensation of up to $1 million. This will be almost triple the existing limits of FOS and CIO.
In the case of a small business primary production dispute, AFCA will be able to award compensation of up to $2 million.
AFCA will retain an unlimited monetary jurisdiction for superannuation complaints.
The establishment of AFCA is part of the Coalition Government’s plan for stronger economy and ensuring a fair go for all Australians.
In a post on Twiiter, the AFCA team said that the new body launches at midnight. The online complaint forms for FOS and CIO will be removed from 12pm today. Those who have an urgent complaint can call to lodge between 12 – 5pm on 1800 367 287 (FOS) and 1800 138 422 (CIO).