The Australian Financial Complaints Authority or ‘AFCA’ is the new external dispute resolution (EDR) Authority to deal with complaints from consumers in the financial system. It is operated by a not-for-profit company limited by guarantee that has been authorised by the Minister for Revenue and Financial Services (Minister).
AFCA replaces the three existing EDR schemes of the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and Superannuation Complaints Tribunal (SCT) so that consumers have access to a single EDR framework.
Membership of AFCA will be required under law or a licence condition. AFCA operations will be financed by contributions made by its members. The scheme will be free to consumers.
· be the single point of contact for complainants for EDR services;
· have higher monetary limits;
· be more accountable to users, including by having an independent assessor to deal with complaints about its handling of disputes; and
· have rules ( terms of reference) to support its dispute resolution functions and legislation, in the case of superannuation disputes.
AFCA will be ready to receive and handle complaints from 1 November 2018.
AFCA will begin operating the CIO scheme from 1 September 2018. Existing CIO Members are required to transition their CIO membership to AFCA by 31 August 2018.
Invitations were issued by AFCA to all CIO Members from 6 August 2018.
If you are a credit representative and you have not yet received an invitation, check with your authorising licensee or aggregator on whether your membership is being transitioned to AFCA under a consolidated process.
AFCA cannot approve a transfer of CIO membership to AFCA if:
Members who are not a credit representative (licensees, Privacy Act participants and other financial services providers) are required to complete AFCA’s annual assessment through the link provided in AFCA’s invitation to transition.A membership invoice will be issued by AFCA based on the information supplied in the assessment for membership covering the period 1 September 2018 to 30 June 2019. For credit representatives, an AFCA application fee of $55 is payable for the period 1 September 2018 to 30 June 2019. The AFCA membership fee is required to fund one-off establishment and transition costs. We understand FOS members have contributed towards these costs through the use of existing FOS accumulated reserves. The superannuation industry are also required to pay two sets of fees in the transition phase, one to fund the runoff of the Superannuation Complaints Tribunal (SCT) and the other to cover the establishment and ongoing costs of AFCA.
ASIC will give financial firms transitional relief to 1 July 2019 to update materials with AFCA’s contact details. For more information, please visit https://asic.gov.au/about-asic/media-centre/find-a-media-release/2018-releases/18-158mr-asic-gives-disclosure-relief-during-transition-to-afca/.