The Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Act 2018 (Cth) (the AFCA Act) authorises AFCA and outlines how our jurisdiction and powers are determined.
The Corporations Act 2001 (Cth) gives ASIC powers to oversee AFCA. ASIC is required to approve material changes to the AFCA scheme under the Corporations Act, 2001. ASIC approved AFCA’s Rules on 6 September 2018.
Our Rules set out what complaints we can consider, the procedures we can use to resolve complaints, remedies we can provide and related matters, including our reporting obligations.
We also publish Operational Guidelines and Transitional Superannuation Guidelines, which set out how we interpret and apply our rules.
A complaint is within our jurisdiction provided it meets the requirements set out in section B of the Rules. Section C of the Rules outline matters that we do not have jurisdiction to consider. Remedies we can award are set out in section D of the Rules. More details are provided in the Rules and the Operational Guidelines, and a summary is provided.
Who can complain to AFCA?
The Rules specify who is able to submit a complaint for us to resolve.
For a business that is part of a group of related companies, there is an important exclusion. We cannot deal with a complaint lodged by a business if the business is part of a group that has 100 employees or more.
There are special rules for superannuation. Superannuation complaints can only be made by the individuals set out in rule B.1.
Who can a complaint be about?
A complaint must be about a financial firm that is an AFCA member at the time a complaint is submitted to us.
Banks and other credit providers, financial planning firms, general insurers, insurance broking firms, life insurers, superannuation fund trustees and RSA providers, stock broking firms and fund management companies are some of the organisations that are required by legislation to be AFCA members, thereby becoming bound by our Rules.
What types of complaints are excluded?
Even if the requirements set out in section B of the Rules are met, the complaint may be within a category of exclusion.
- Rule C.1.2 sets out some mandatory exclusions; we are not able to consider a complaint that is within one of these exclusions.
- Rule C.2 allows us discretion to decide that it is appropriate to exclude a complaint, and gives examples of where we may do this. We will not exercise this discretion to exclude a complaint lightly. The discretion will only be used in cases where there are compelling reasons for deciding that we should not consider a complaint.
See Operational Guidelines, section C for more detail.
What process does AFCA follow to decide whether a complaint is within its jurisdiction?
We will try to identify as soon as possible whether a complaint is properly within our jurisdiction. This issue is first considered at the time of referring the complaint to the financial firm. It may be reconsidered as new information emerges.
In some cases, a financial firm may advise us that they believe a complaint is not within our jurisdiction. If this occurs, we will refer the complaint to our specialist Rules team to review the complaint and conduct a full jurisdictional assessment to check whether it is a complaint we can consider. We will advise the complainant and financial firm when this is occurring and will advise them of our assessment.
In complex matters, we may seek advice from senior AFCA staff including an AFCA Decision Maker before reaching a view on whether the complaint is within our jurisdiction. We may also need to request further information from the parties to reach a view.
The process of excluding a complaint can involve:
- a jurisdictional assessment by an initial AFCA staff member
- a jurisdictional review by a senior AFCA staff member or, in complex cases, by an AFCA Decision Maker.
- More information is available in the Operational Guidelines.
We have broad powers to require a complaint party to take action to assist our consideration of a complaint. We will normally engage with a party about our proposed requirements before using these powers. When deciding whether to use these powers, we consider questions such as:
- What further information may assist AFCA's handling of the complaint?
- Could a party to the complaint provide the further information?
- If so, what would be the best way for AFCA to obtain the further information from the party?
AFCA will also take into account the costs a party may have to incur as a result of complying with our request for further information.
We ask questions of the parties to a complaint, obtain information from them and reach a decision based on the available information. Because we primarily obtain information from the parties to a complaint, we rely on those parties to obtain any necessary information from third parties, except for a superannuation complaint where we have statutory powers.
We may require a party to attend an interview or examination, but we do not have power to cross-examine that party. We may also require a complainant to provide all reasonable assistance to the financial firm.
Note: This text is reproduced, based or adapted from AFCA's Operational Guidelines.