Latest update – AFCA legislation passes Parliament
The Treasury Laws Amendment (Putting Consumers First- Establishment of the Australian Financial Complaints Authority) 2017 Bill (the AFCA legislation) passed the Parliament on 14 February, 2018.
This legislation establishes AFCA and will see all financial industry complaints (including superannuation complaints) handled by the single body. When fully operational, AFCA will simplify, strengthen and increase access to free external dispute resolution for consumers and small businesses.
The Minister for Financial Services, Hon Kelly O’Dwyer MP has indicated that the Australian Financial Complaints Authority (AFCA) is to be operational no later than 1 November, 2018. You can read her media statement here. This media release outlines important information regarding jurisdictional limits and compensation caps, including that AFCA:
- will apply a new definition for small business (any business with fewer than 100 staff);
- will have increased compensation caps for small business primary production producers (access of up to $2m in compensation for disputes about credit facilities)
- will have new sub-limits caps – $13,400 per month for income stream insurance product disputes; $15,000 for uninsured third party motor vehicle claims, and
- that the separate compensation cap for general insurance broker disputes will increase to $250,000.
FOS supports the Government’s reforms in this area. We will continue working closely with Dr Malcolm Edey’s transition team, ASIC and all stakeholders to enable AFCA to be ready to operate by the commencement date.
We will keep you updated as soon as we have more information. In the meantime, you can find further details in the related links on the right.
In April 2017 the “Review of the financial system external dispute resolution and complaints framework” (The Ramsay Review) was finalised. It made 11 recommendations including the creation of a single body to cover all disputes in the financial services industry.
Since that time FOS has been working closely and collaboratively with the Superannuation Complaints Tribunal (SCT) as part of the joint working group for a prudent preliminary examination of the issues that could flow from the creation of a single EDR body.
The legislation to establish the Australian Financial Complaints Authority (AFCA) was introduced on the 14 September 2017. The legislation passed the Senate, with some amendments, on 6 December 2017.
As of 14 February 2018, the legislation to establish AFCA passed the House of Representatives.
Our plans to keep you informed
We will keep you informed by updating this page with the details of what has changed, the impact of that change and what we expect to see next. So watch this space.
In addition to keeping you informed, we are planning a number of engagement activities for FOS members over the next 6-12 months as AFCA takes shape. These activities will aim to provide consultation opportunities, knowledge sharing events and tools to help make this transition as easy as possible.
Our plan aims to inform, listen, share and invest with our members as much as possible during this period of change. But we are always keen to hear from you about how we can do this better.
You can tell us at [email protected], a dedicated member engagement feedback email address. Dispute and Membership feedback should be provided through the usual channels.