The Australian Financial Complaints Authority (AFCA) scheme was authorised by the Minister for Revenue and Financial Services, under the Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Act 2018 (Cth) (the AFCA Act). The AFCA Act gained Royal Assent on 5 March 2018.
The AFCA Act sets out standards that AFCA must meet; it provides additional powers in relation to superannuation disputes and gives ASIC certain regulatory powers, including the power to issue directions. AFCA’s terms of reference will set out how legislative and policy requirements will be met.
The AFCA Act amended the Corporations Act 2001 (Cth) and other related legislation, to implement the central recommendations of the Ramsay Review for:
- the establishment of a new one-stop-shop external dispute resolution (EDR) framework – the Australian Financial Complaints Authority (AFCA) – replacing the Superannuation Complaints Tribunal (SCT) and the existing EDR schemes approved by the Australian Securities and Investments Commission (ASIC); the Financial Ombudsman Service (FOS); and the Credit and Investments Ombudsman (CIO)
- an enhanced internal dispute resolution (IDR) framework to deal with all consumer financial disputes about products and services provided by financial firms, including superannuation disputes.
The AFCA Act outlines how the AFCA external dispute resolution scheme should operate, including authorisation of the scheme, and mandatory requirements and general considerations for the operation and regulation of AFCA.
The AFCA Act also repealed the Superannuation (Resolution of Complaints) Act 1993 (Cth) and gives AFCA additional provisions relating to superannuation.
Under the AFCA Act, AFCA is required to report to ASIC, APRA and the ATO about certain matters, and ASIC has power to issue certain directions to AFCA.
The AFCA Act also outlines the general considerations for an external dispute resolution scheme, which apply to AFCA as part of its authorisation. These are: