Submission on the Australian Financial Complaints Authority (AFCA) Rules Changes
Consumer Action Law Centre (Consumer Action) welcomes the opportunity to comment on the proposed changes to expand AFCA’s jurisdiction to deal with eligible complaints about conduct dating back to 1 January 2008 (legacy complaints jurisdiction).
This submission responds to:
- AFCA Rules Change Consultation paper, 18 March 2019;
- Draft amendments to the Rules;
- Draft amendments to the Operational Guidelines; and
- AFCA Scheme (Additional Condition) Amendment Authorisation 2019.
Consumer Action strongly supports redress for victims of misconduct by financial service providers (FSP), especially for conduct flowing from the Financial Services Royal Commission. Our views on effective redress for past disputes are set out in a detailed joint consumer submission to the Ramsay Review.
The proposed addition of Section F to the AFCA Rules establishes a past disputes forum to provide redress for claims that are outside existing External Dispute Resolution (EDR) time limits. While the draft amendments properly implement the Ministerial authorisation condition, gaps remain in the scope of this past disputes forum. For example, there is no redress for people whose complaint is against an FSP that is not a compulsory and current member of AFCA, such as insolvent firms.
Community outreach will be critical to the effectiveness of the legacy complaints scheme. As the application window for legacy complaints is only 12 months, it is imperative that outreach starts immediately. This should be done by disseminating information to those who work with communities in remote and regional areas across Austraila, including community organisations and financial counsellors. This information will also need to articulate the meaning of ‘conduct’ which will be reviewed under the legacy complaints scheme, to increase the transparency of the process and make it easier for potential complainants to assess whether their claim is within AFCA’s legacy complaints jurisdiction.