ASIC has approved changes to the Australian Financial Complaints Authority (AFCA) Rules which give effect to the AFCA authorisation condition introduced by Government on 19 February 2019.
From 1 July 2019, Australian consumers and small business will be able to lodge complaints with AFCA about the conduct of financial firms dating back to 1 January 2008. 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 Chief Ombudsman and CEO David Locke has warmly welcomed this change saying, “AFCA’s ability to consider legacy complaints dating back to 2008 provides people with the opportunity to now have their matters independently reviewed.”
“We have identified thousands of complaints that could potentially be made to AFCA, based on those that were lodged but deemed outside the jurisdiction of previous schemes,” Locke said.
“However, there will also be many matters that were never lodged with the Financial Ombudsman Service, the Credit and Investments Ombudsman or the Superannuation Complaints Tribunal that may now be brought to us. We also expect that these matters are likely to be highly complex, and further complicated by the number of years that have passed since the issue occurred.
“It is our expectation that firms will proactively resolve these legacy matters themselves where possible, as part of their commitment to justly remediate the misconduct of the past and meet the community’s expectations of fairness. Where firms are unable to satisfactorily resolve the complaints, AFCA will start investigating these matters from 1 October 2019.”
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.
Consistent with the Government’s condition 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,1 July 2019 to 30 June 2020.
AFCA has also released updated Operational Guidelines which give further guidance on how AFCA will deal with legacy complaints. The new jurisdiction, which covers complaints about conduct going back to 2008, may raise novel issues about how AFCA deals with complaints.