New Australian Financial Complaints Authority
On Tuesday 9 May, Treasurer Scott Morrison announced the creation of a new dispute resolution scheme, the Australian Financial Complaints Authority (AFCA).
The government simultaneously released the Final Report of the Review of the financial system external dispute resolution and complaints framework, which includes recommendations for the creation of the AFCA.
The AFCA will replace the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal (SCT).
"We acknowledge the work that the review panel has undertaken and the service improvements the recommendations aim to achieve with a one-stop-shop," said SCT Chairperson Helen Davis.
The SCT has previously raised concerns about the limitations of an industry ombudsman structure in relation to superannuation complaints. "We welcome the Final Report recognising the unique nature of superannuation complaints. The recommendations provide for improved service while acknowledging the need for a high level of consumer protection," said Ms Davis.
The Final Report contains 11 recommendations, including:
- Creating a single EDR body for all financial disputes
- Retaining statutory powers for superannuation disputes under the new scheme
- Enhancing access to redress for consumers
- Increasing the transparency of internal dispute resolution.
"We will continue to work with the government and stakeholders regarding the recommendations and transition considerations," said Ms Davis.
"The SCT looks forward to continued engagement in the process to ensure continuity of service and a smooth transition from one service to the other, with consumers knowing what to expect.
"A key concern will be to ensure that the new dispute resolution scheme is as strong as it can possibly be for superannuation, with enforceability of determinations, powers to obtain relevant information and maintenance of consumer protection paramount."
It is proposed that the SCT will continue operating after the introduction of the AFCA to ensure that complaints lodged prior to its introduction are finalised.
"We’d like to reassure our current complainants and anyone thinking of bringing a complaint to us that the SCT is open for business," said Ms Davis.