The Australian Financial Complaints Authority (AFCA) has welcomed recommendations from the Senate Inquiry into credit and financial services targeted at Australians at risk of financial hardship.
The report made 20 recommendations for the small credit sector, a number of which relate to the work of AFCA.
Chief Ombudsman and Chief Executive Officer, David Locke said AFCA supports the recommendations and welcomed the improved consumer protection they would provide.
AFCA believes these measures are critical to ensuring that consumers and small businesses are treated fairly, particularly those at risk of hardship.
“AFCA welcomed the opportunity to provide a submission to this Inquiry and we were pleased to see the Committee has made recommendations that would increase consumers' access to external dispute resolution,” he said.
AFCA notes the Committee’s recommendation that a regulatory framework should be implemented for all providers of credit and debt management, repair and negotiation activities, that are not currently licensed by the Australian Financial Security Authority.
We also note and welcome the recommendation that those providers should be members of AFCA, giving consumers access to an external dispute resolution scheme.
The committee also recommend that consideration be given to an appropriate regulatory framework for the buy now pay later sector, which would include ensuring consumers have access to internal and external dispute resolution.
AFCA also welcomes the recommendations relating to the funding of financial counselling and community and financial rights legal centres.
“AFCA and its predecessor schemes have been long-time supporters of financial counselling services and special legal centres and have supported measures to ensure that financial counselling services are funded adequately now and in the future,” said Mr Locke.
"Financial counsellors and community legal centres provide support to vulnerable and disadvantaged consumers to access our service and let people know that a service like AFCA can consider their complaint at no cost to them".
“These services provide numerous services to the community, including promoting financial capability and reducing the risk of vulnerable and disadvantaged consumers being targeted by predatory businesses. It is pleasing to see this Senate Inquiry has found that sustainable funding and operation for these services should be supported,” Mr Locke continued.
- The Australian Financial Complaints Authority (AFCA) is a non-government organisation that is approved by the Federal Government to administer a free, fair and independent dispute resolution scheme.
- AFCA consider complaints about financial products and services.
- AFCA’s service is offered as an alternative to tribunals and courts to resolve complaints consumers and small businesses have with their financial firms. AFCA was established following the 2016 Ramsay Review into how Australia’s external dispute resolution framework could be improved to deliver effective outcomes for all Australian consumers and small business.
- On 1 November 2018, AFCA replaced the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal as the one-stop-shop for financial dispute resolution. Consumers and small businesses can lodge a complaint to AFCA online at afca.org.au, via email to email@example.com or by phoning 1800 931 678.
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