AFCA has introduced a merits assessment to its Case Management stage that identifies unmeritorious complaints before they progress to a Preliminary View or Decision – making the handling of these types of complaints faster, cheaper, and fairer for all parties. 

The process was originally tested in a pilot program, conducted between 1 April and 30 June 2021, that assessed the merit of certain kinds of complaints at the very early stages of AFCA’s Fast Track system. The time taken to resolve the selected cases in the pilot was halved and in some cases the fee charged was as much as 75 per cent less than in comparable cases.   

The pilot was in direct response to feedback from members, who told AFCA that the cost of paying for some determinations can outweigh the initial service or product offered to their customers. As a result, some members found they were conceding to complaints for commercial reasons, rather than fairness. 

This issue was also made worse by the conduct of a small number of third party paid representatives who used questionable tactics to put unreasonable pressure on members when resolving complaints. 

To address this, AFCA has now made its Case Management merits assessment a permanent feature of its system. This will allow AFCA to assess complaints without merit and use its discretion under Rule A.8.3 to decline to consider the complaint during Case Management before progressing to a Preliminary Assessment or formal Decision.

This assessment is generally more appropriate in cases where the information about a complaint is provided early and clearly shows there is no error and/or loss. Complaints that raise more complex issues with significant documentation, where an investigation is required to reach a view on what has most likely occurred, are less suitable for such an assessment. 

This is a key part of AFCA’s response to Recommendations 4 and 7 of the AFCA Independent Review, addressing poor conduct by some paid advocates and ensuring its funding model design does not disincentivise firms from defending complaints.  

You can read more about the pilot program here.  

About AFCA Rule A.8.3

Under Rule A.8.3, AFCA can cease consideration of a complaint in circumstances where:  

• The complaint is without merit  
• The complainant has suffered no loss (or has been appropriately compensated for such loss and AFCA would not award any further amount)
• The financial firm has committed no error.   

This means in circumstances where a complaint may be within jurisdiction and has proceeded to Case Management, an AFCA case worker will consider the nature of the complaint and supporting information to decide if it is appropriate to consider the complaint further.  

AFCA will only decline to consider a complaint under A.8.3 in limited circumstances and where there are compelling reasons. AFCA case workers will make sure that there is enough information about the facts of a complaint and the issues involved, before deciding whether to decline to consider the complaint any further. 

A.8.3 is not a reason for a complaint to be excluded under AFCA’s jurisdiction but rather outlines circumstances when AFCA may decide it is not appropriate to consider a complaint any longer.  

While an A.8.3 assessment allows AFCA to decline to consider a complaint further, it is not appropriate for the Rules team to make those assessments. This because any assessment of merit of a complaint is best done by an AFCA case worker who has the expertise to make such decisions. AFCA's Rules team focuses on whether a complaint falls within or outside of AFCA’s jurisdiction.  

The AFCA Approach to excluding complaints provides further guidance on when AFCA may decide to cease consideration of a complaint under A8.3.