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In Australia, everyone should be able to easily access a free, fair, fast and effective service to resolve complaints against their lender, insurer or superannuation fund. To ensure that the Australian Financial Complaints Authority (AFCA) lives up to its promise of improving the existing dispute resolution framework in the financial system, it is essential to get the AFCA Rules right.

Five consumer groups made a joint submission to AFCA’s consultation on its draft Rules (terms of reference). This joint submission is broadly supportive of the draft Rules but recommends several important changes to ensure that Rules are consistent with best practice and the design principles.

Our main recommendations are:

• Introduce a new ‘good faith’ requirement in light of the ongoing revelations from the Financial Services Royal Commission.
• Adopt the CIO’s more expansive approach to actions that financial firms must not engage in while a complaint is on foot, including that it must not list a credit default, issue a letter of demand, immobilise a car or threaten enforcement action;
• Retain the existing and more prescriptive approach to the content and process for jurisdictional decisions, Preliminary Assessments (including that it must be in writing with reasons) and Determinations;
• Include the power to vary or set aside a contract as a remedy;
• Amend the thresholds for excluding complaints or deciding to no longer handle complaints, to ensure no denial of access to justice; and
• Clarify that a complaint can arise from or relate to the failure of a financial firm to provide documents upon request.

A full list of 17 recommendations is available at Appendix B.

Read the full submission here [PDF].