2020–21 Annual Review

Complaints outside the Rules

The AFCA Rules set out the rules and processes that apply to all complaints submitted to the AFCA scheme, including superannuation complaints.

Our AFCA Rules Team reviews complaints when questions are raised about whether a complaint is within our jurisdiction.

Complaints may be outside of our jurisdiction if the party is not eligible to lodge a complaint, or the financial firm is not a member. Further, complaints may be outside our jurisdiction if we decide that they must be excluded under the AFCA Rules. There are mandatory and discretionary exclusions under the AFCA Rules.

Mandatory exclusions

There are mandatory exclusions that have certain categories of complaints that AFCA must exclude.

These categories of exclusions are:

  • general exclusions
  • exclusions that apply specifically to credit complaints
  • exclusions that apply specifically to insurance complaints, including superannuation complaints
  • exclusions that apply specifically to investment complaints, including superannuation complaints
  • exclusions that apply specifically to traditional trustee company service complaints.

Discretionary exclusions

There are instances where AFCA may, at its discretion, exclude a complaint if AFCA considers this course of action is appropriate. We do not exercise our discretion to exclude a complaint lightly. Discretion is only used in cases where there are compelling reasons for deciding not to consider the complaint.

AFCA may exclude a complaint if we think that a court, tribunal, another dispute resolution scheme, or the Office of the Australian Information Commissioner is a more appropriate place to deal with a complaint. While doing so, AFCA considers several factors such as the potential advantages and disadvantages to each party of having the complaint determined by AFCA, or in another place, and whether AFCA’s process is appropriate to resolve the complaint, compared to the process adopted in other forums.

Sometimes consumers and small businesses lodge complaints that might be outside our Rules.

If the financial firm consents and we consider it appropriate, then we are able to consider these complaints.

Where a complaint is excluded under AFCA Rules

Sometimes there are cases where AFCA is unable to consider a complaint. Sometimes, with the parties’ consent, we may be able to facilitate the parties to resolve the matter between themselves. Where we are unable to consider a complaint, AFCA provides helpful information to complainants about other ways they may be able to resolve their complaints outside of AFCA. We may refer them to an appropriate other body or place where they can be assisted.

Reasons for complaints outside AFCA’s jurisdiction

In the 2020–21 financial year, we excluded 6,786 complaints outside AFCA’s jurisdiction.

‘Financial service not provided’ continued to be the most common reason a complaint was outside the Rules due to eligibility, with 2,271 complaints falling into this category. This may occur where the complainant incorrectly lodged against the wrong financial firm. Often, they have had a financial service provided, but not by the firm they selected.

The second highest category for exclusion was uninsured motor vehicle criteria not met (367), followed by complainant not eligible – general (316).

The top reason complaints were outside the Rules under mandatory exclusions was that it had already been dealt with by another court/tribunal/scheme (328). This was followed by assessment of credit risk (312) and level of fee/premium/charge/interest rate (246).

For the discretionary exclusions, the top three were 508 complaints related to general discretion to exclude, with 401 related to a more appropriate place and 263 relating to non-compliance of processes by a credit representative.

During the last financial year, as we finalised the remaining complaints from the predecessor schemes, we found that 120 complainants were outside the predecessor terms of reference.

Complaints were also excluded when they involved representation or assistance by a paid agent and AFCA considered the agent to be engaging in inappropriate conduct that was not in the best interest of the complainant, or the complaint was not accompanied by information required by AFCA.

Top three reasons complaints were outside the Rules – eligibility not met
Reason Total
OTR B.2.1 (a) Financial service not provided 2,271
OTR B.2.1 (f) Uninsured motor vehicle criteria not met 367
OTR A.4.1 Complainant not eligible – general 316
Top three reasons complaints were outside the Rules – mandatory exclusions
Reason Total
OTR C.1.2 (d) Dealt with by court/tribunal/scheme 328
OTR C.1.3 (a) Assessment of credit risk 312
OTR C.1.2 (a) Level of fee/premium/charge/interest rate 246
Top three reasons complaints were outside the Rules – discretionary exclusions
Reason Total
OTR C.2.1 Discretion to exclude – general 508
OTR C.2.2 (a) More appropriate place 401
OTR C.2.2 (g) Credit representative non-compliance with process 263

 

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