Updated: 2 January 2024

Finalising AFCA’s new Forward-Looking Review Mechanism (FLRM) governance model (Recommendation 9)

Recommendation 9 of the Independent Review focuses on enhancing the visibility, accessibility and independence of AFCA’s Forward-Looking Review Mechanism.   

AFCA has consulted on the changes required to AFCA’s Operational Guidelines to implement Recommendation 9, including the removal of the requirement to show an error of law. The changes to the Operational Guidelines will strengthen the visibility and accessibility of the process.  The changes to the Operational Guidelines will take effect from 1 July 2024, pending ASIC approval.  

In addition, AFCA has recently finalised a revised governance model, together with new policies and processes to further improve the operation of the FLRM from 1 July 2024. The revised model was developed with assistance from external consultants.  We recently outlined the key features of the model at AFCA’s Member Forum in November 2023. From 1 July 2024, Forward-Looking Review decisions will be undertaken by the Deputy Chief Ombudsman based on the recommendations of a panel including the relevant Lead Ombudsman, a consumer and industry representative drawn from panel members appointed by the AFCA Board.  AFCA may also engage independent experts to assist in its review of the approach and request a costs contribution from applicants seeking a review.  AFCA will establish a centralised team to manage this work.

An application for AFCA to undertake a Forward-Looking Review of an approach is one way consumers and financial firms can engage with AFCA about how it is applying its fairness jurisdiction to complaints handling. This includes identifying a legal principle, industry code or guidance, or good industry practice which the applicant considers should apply, and in what manner, consistent with the AFCA Scheme Principles. While it is not a mechanism for reopening finalised complaints or reviewing the merits of an ACFA determination, Forward-Looking Reviews may influence our approach to resolving future complaints.   

We will publish further information including the key features of the new FLRM in 2024. AFCA will also seek suitable additional candidates to be nominated for appointment to its consumer and industry representatives panel, to assist in this work.  

Finalising the governance model for developing and consulting on Approach Documents (Recommendation 11)    

Recommendation 11 of the Independent Review required AFCA to continue to consult with stakeholders in the development of Approach documents, prior to their publication.

In response to the recommendation, AFCA has recently finalised a new governance model with assistance from external consultants to ensure a robust, consistent and inclusive consultation process is undertaken for this work. The final consultation governance model covers the complete life cycle of an Approach document including its development and review. Further information about the model will be published in early 2024.

In addition, to ensure an inclusive, accessible and consistent process, AFCA has piloted several different consultation methods during 2022 and 2023. It has successfully tested these methods with its recent consultation on the AFCA funding model, the proposed changes to AFCA’s Rules and Operational Guidelines and its draft approaches on Responsible Lending and Lending to Small Business. The consultation methods piloted have been very positively received. AFCA will incorporate these methods including webinars, oral and written submissions, workshops, and interactive QA sessions, into our ongoing consultation model as appropriate.

AFCA has also announced that it will publish an annual work program for the development or review of Approach documents to be undertaken in each financial year. This will provide external stakeholders with significant notice of our plan to develop or review Approach documents when consultation will take place and how stakeholders can participate in the process.  

We look forward to providing more information about our model on Approach documents for external stakeholders next year.


Published: 15 December 2023


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About AFCA

The Australian Financial Complaints Authority (AFCA) is a non-government ombudsman service providing free, fair and independent help with financial disputes. It is a one-stop-shop for consumers and small businesses who have a dispute with their financial firm, over things such as banking, credit, insurance, advice, investments or superannuation. Where an agreement cannot be reached between parties, AFCA can issue decisions that are binding on financial firms.

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