Government sets the ball rolling for new financial complaints body
The government has created a transition team to oversee the establishment of the Australian Financial Complaints Authority (AFCA), a one-stop-shop for resolving financial and superannuation disputes.
The team, tasked with ensuring the AFCA is operational by 1 July 2018, will be chaired by Dr Malcolm Edey, the former Assistant Governor (Financial System) of the Reserve Bank of Australia.
He will be supported by a team located in Treasury that will draw on private sector expertise as required.
The AFCA, announced in the May Federal Budget, will be created via the merger of three dispute resolution schemes: the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal.
Minister for Revenue and Financial Services, Kelly O’Dwyer, says the transition team will advise the government on AFCA’s terms of reference, governance and funding arrangements. It will also make recommendations on the authorisation process for AFCA and the transitional arrangements required to appropriately settle the cases currently before the three existing schemes.
Once legislation to establish the AFCA has passed the Parliament, she says the focus of the transition team will shift to overseeing the operational transition from the existing schemes to AFCA.
O’Dwyer says the transition team will consult extensively with industry and consumer stakeholders, as well as the three existing schemes it replaces.
According to the Treasury, the AFCA will deal with all financial disputes, including superannuation disputes, and provide access to free, fast and binding dispute resolution. Financial companies will be required to be members of AFCA and its decisions will be binding on all companies.
It will cost consumers nothing to bring a complaint to AFCA.
AFCA will be able to hear disputes of a higher value so that more consumers and small businesses will have their disputes heard, and if they have wrongfully suffered a loss, access fair compensation, says Treasury.
AFCA will be governed by an independent board, with an independent chair and equal numbers of directors with consumer and industry backgrounds.