Updated: 30 October 2023

The vast majority of financial firms will pay the same or less to the Australian Financial Complaints Authority under a new, user-pays funding model that will be implemented from July 1.

The new model was approved by AFCA’s independent board after an extensive consultation process with users of the external dispute resolution scheme and peak industry bodies.

“The feedback we received was overwhelmingly positive,” AFCA’s Chief Ombudsman and Chief Executive Officer, David Locke, said. “Members welcomed the fact the model rewards good complaints resolution performance, and that it apportions fees fairly based on use of AFCA’s services.

“This is a fair, transparent and equitable funding model,” Mr Locke said. “Ultimately, firms have control over the fees they pay by taking a resolution mindset when managing complaints.”

AFCA’s consultation process included more than 60 meetings with peak bodies and members likely to experience a greater impact, five webinars open to all member firms, and the delivery of 11,000 individual, tailored impact assessments to financial firms.

Mr Locke thanked AFCA members and the peak bodies for their engagement with the consultation process. “Their feedback helped us improve and refine the model,” he said. 

Feedback led to instalments being introduced for member payments above a threshold amount, and no fee being payable for complaints found upon initial assessment to be outside AFCA’s jurisdiction. In addition, the five free complaints provided under the new model will not be included when AFCA calculates the user charge that applies to more frequent users of the service.

Under the new model about 90% of members of the national ombudsman scheme will see a positive or neutral impact on total fees. The 10% of heavy scheme users that are expected to experience an increase in cost will do so because this more accurately and fairly reflects their usage.

The model minimises the cross-subsidisation across sectors that was occurring under the interim model put in place at AFCA’s inception in 2018, by considering both the volume of complaints registered for a firm along with the time taken to resolve them.

The new model includes a single registration fee and a simplified complaints fee structure. All members qualify for five free complaints a year.

The superannuation levy has been abolished and super funds have been brought under the same fee structure as other scheme members – with a positive or neutral impact for most super fund trustee members.

Overall, 95% of licensed financial firm members of the AFCA external dispute resolution scheme will pay only their annual registration fee, which has been set at $375.55 for the coming financial year. Among authorised credit representatives, 99.9% will pay only $65.98 annually – steady with their annual membership levy for the past year.

Mr Locke noted that AFCA would continue to monitor the performance of the new model over the coming year, including ensuring positive, fair and equitable member and complainant resolution behaviours were occurring under the new model.

Mr Locke also said AFCA would continue to work with firms and peak bodies to help the financial services sector reduce and more readily resolve complaints.

“Our user-pays approach incentivises firms to use internal dispute resolution to decrease complaints to AFCA,” he said. “At AFCA, we believe our role isn’t just to resolve complaints escalated to us but also to play a preventative role.”

For more information see the AFCA Funding Model Consultation Report 

Note to editors: There are two types of AFCA member – licensee financial firms and authorised credit representatives (ACRs). When we use the word ‘firms’ we are referring to licensee financial firms. 


Published: 31 May 2022


Media enquiries media@afca.org.au

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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