2020–21 Annual Review

Membership

Who are our members?

At 30 June 2021, AFCA had 40,760 members. These included banks, insurers, credit providers, financial advisers, debt collectors and buyers, superannuation trustees and other financial firms. Around three quarters (30,175) of these members were authorised credit representatives (ACR), while 10,585 were Financial Services Providers (FSP).

While some of these are very large institutions, the majority of our members are small and medium enterprises. The most common member types in 2020–21 were mortgage brokers, finance brokers, financial advisers/planners, credit providers and accountants.

Most of our members do not have complaints made against them; in fact, only 16% of our members had a complaint about them in 2020–21, which was a slight decrease from the previous reporting period.

Australian financial services licensees, Australian credit licensees, authorised credit representatives and superannuation trustees are required to be members of AFCA under their financial services licence conditions, in accordance with ASIC Regulatory Guide RG 165.

Under the National Consumer Credit Protection Amendment (Debt Management Services) Regulations 2021 certain debt management services were prescribed as a type of credit activity for the purposes of the National Consumer Credit Protection Act 2009 (Cth). As a result, from 1 July 2021 providers of debt management services were also required to hold an Australian credit licence or, under transitional arrangements, have applied to ASIC for an Australian credit licence by 30 June 2021.

To ensure compliance with these regulations, they were also required to be members of AFCA’s external dispute resolution scheme by 30 June 2021. AFCA currently has more than 40 debt management firms as members. AFCA worked closely with ASIC and debt management firms in the first half of 2021 to ensure they met their requirements by 1 July 2021.

AFCA also has a number of organisations that are voluntary members. These members see the value AFCA can add, both in helping resolve complex disputes, and in providing their customers with open and transparent mechanisms for dealing with complaints when they arise.

Voluntary members include Buy Now Pay Later companies (some are not required to hold an AFSL), that are members of the Australian Finance Industry Association (AFIA). In March 2021, AFIA launched the self-regulated ‘Buy Now Pay Later Code of Practice’, which states that all providers should be members of AFCA.

For information on how we engage with our members, please see Member engagement.

As at 30 June 2021

40,760 members

84% of members did not have a complaint lodged against them

Number of members
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Number of members chart
Member type Percentage
Authorised credit representatives 74%
Financial firms (AFSL and ACL holders) 26%
Members by state
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Members by state chart
State Percentage
NSW 37%
Victoria 29%
Queensland 16%
Western Australia 9%
South Australia 5%
ACT 2%
Tasmania 1%
NT <1%
Unknown <1%
Top five member types with the most complaints
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Top five member types with the most complaints chart
Member type Total
Bank 26,281
General insurer 13,896
Credit provider 8,216
Superannuation fund trustee/advisor 3,643
Underwriting agency 2,115

AFCA Rules change to provide certainty

In January 2021, AFCA amended its Rules to provide clarity for consumers and financial firms regarding our jurisdiction to receive complaints about the conduct of an authorised representative of an AFCA member.

The Rules change was the result of a legislative instrument issued by ASIC on 5 January 2021, requiring AFCA to update its Rules.

The Rules change follows the judgment of the NSW Supreme Court in DH Flinders Pty Limited v Australian Financial Complaints Authority, in November 2020. This case related to AFCA’s jurisdiction to consider a complaint against a licensee in relation to the conduct of its corporate authorised representative, specifically where the conduct of the representative was outside authority.

The judgment highlighted that AFCA’s Rules needed to be clearer to ensure they reflected the same obligations and liabilities for licensees as set out in the Corporations Act.

At ASIC’s direction, the Rules now clearly reflect that AFCA has jurisdiction to assess the responsibility of licensees for the conduct of their authorised representatives as set out in the Corporations Act and the National Consumer Credit Protection Act.

The updated AFCA Rules apply to complaints received by AFCA from 13 January 2021 onwards.

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