The Australian Financial Complaints Authority (AFCA) and Compensation Scheme of Last Resort Ltd (CSLR Ltd) have signed a memorandum of understanding (MoU) setting out how they will work together to support a fair and efficient financial services sector.

The MoU reflects the parties’ intention to maintain a proactive, open and collaborative relationship to effectively perform their respective functions as defined by legislation.

It acknowledges the importance of consultation and cooperation in the discharge of their responsibilities and governs the administrative arrangements between them. 

The MoU has been signed by AFCA’s Chief Ombudsman and Chief Executive Officer David Locke and the Chief Executive Officer of Compensation Scheme of Last Resort Ltd, David Berry.

“The CSLR and AFCA have clearly defined, and distinct roles governed by our respective legislation and rules,” Mr Locke said. “Consultation and cooperation will be important in effectively discharging our responsibilities.”

Mr Berry said: “For the CSLR to support victims of financial misconduct, it is vital we have clear and transparent procedures in place with AFCA to support effective and efficient outcomes.” 

AFCA is an independent, not-for-profit ombudsman service for the financial services sector. Its external dispute resolution service helps consumers and small businesses resolve complaints with financial firms in banking and finance, investments and advice, insurance and superannuation. 

CSLR Ltd is authorised by the Minister for Financial Services as the operator of the Compensation Scheme of Last Resort, which began operation on 2 April 2024. Its role is to provide compensation to eligible consumers, where the consumer has a determination issued by AFCA, the financial firm has not paid the consumer in full in accordance with the determination, and the consumer has otherwise been unable to recover the compensation.

The MoU is available here. 

Published: 8 May 2024