Do you need help resolving a problem with a bank, credit provider or superannuation fund? The new Australian Financial Complaints Authority (AFCA) provides a free and easy-to-access service for consumers and small businesses to make a financial services complaint
. And encouragingly, AFCA will soon be able to hear complaints about matters dating all the way back to 2008.
The recent royal commission into the banking, superannuation and financial services industries has turned a very public spotlight on misconduct in this sector. In a timely move to empower consumers, the government has recently established the Australian Financial Complaints Authority (AFCA), a new dispute resolution body for financial services complaints. If you are a consumer or small business, AFCA can now hear your complaints about:
- credit, finance and loans;
- banking deposits and payments;
- investments and financial advice; and
AFCA is designed to be a “one stop shop” that replaces three other bodies that previously handled these complaints (the Financial Ombudsman Service, the Credit and Investments Ombudsman, and the Superannuation Complaints Tribunal).
How does it work?
AFCA encourages consumers and small businesses with a complaint to try contacting the other party first. If that does not resolve the problem, you can lodge a complaint to AFCA online using their easy, step-by-step process. There are no fees for lodging a complaint.
Before lodging, you will need to check the following:
- Am I within the applicable time limit? Most complaints must be lodged within six years of becoming aware that you have suffered a loss, but certain types of superannuation and credit complaints have different (and shorter) time limits. In welcome news, from 1 July 2019 there will be a limited 12-month period in which you can lodge a complaint dating back to 1 January 2008.
- Is my complaint within any applicable monetary limits? There is no limit on the size of superannuation complaints that AFCA can hear, but most other types of complaints are limited to $1 million in value (or $5 million for a small business complaint about a credit facility).
- Is the entity I’m complaining about covered by the AFCA scheme? The scheme is broad and covers entities such as banks, insurers, credit providers, superannuation funds (but not SMSFs – more below) and anyone licensed to provide financial advice.
After receiving a complaint, AFCA will usually try to help the parties resolve the dispute informally through negotiation. If this does not work, AFCA may ultimately make a determination that will be binding on the other party, provided that you, the complainant, accept the determination. (For superannuation matters, the determination will be binding regardless of whether the complainant accepts it.)
What about SMSFs?
SMSFs are unique because the members who hold benefits in the fund are also the trustees (or directors of its trustee company). SMSF trustees are eligible to complain to AFCA about financial services problems they encounter (for example, about financial advice received from an adviser). However, AFCA cannot hear a complaint about the decision or conduct of an SMSF trustee.
This means that an SMSF member cannot complain to AFCA about decisions that the other trustees have made. It also means a potential beneficiary of a deceased SMSF member’s benefits cannot complain to AFCA about how the trustees paid out the benefits. In these cases, the parties would need to go through the legal system to obtain a resolution.
However, members of other types of superannuation funds (industry funds, retail funds, etc) may complain to AFCA about their trustee’s decisions or actions. This might involve, for example, a claim for disability benefits, payment of death benefits, or an error, delay or omission by the trustee.
We’re here to help you
Handling a problem with a bank, credit provider or superannuation fund can be stressful. Contact our office if you need help resolving a current matter or have an outstanding complaint as far back as 2008 that could be referred to AFCA. We can assist you with preparing a claim to get a fair and fast resolution.