The Australian Financial Complaints Authority (AFCA) notes the final report from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The final report was handed down to the Governor-General on 1 February 2019.
AFCA Chief Ombudsman and Chief Executive Officer, David Locke said, “AFCA welcomes the recommendations in Commissioner Hayne’s final report and the Government’s response. We believe these measures are critical to ensuring that consumers and small businesses are treated fairly.”
Specifically, AFCA notes Commissioner Hayne’s recommendation and the Government’s response on the establishment of a compensation scheme of last resort.
“AFCA and its predecessor schemes have long advocated for the establishment of a compensation scheme of last resort,” said Mr Locke.
“A compensation scheme of last resort is a really important back-stop that ensures that people who have been the victims of misconduct, and lost out through no fault of their own can finally be properly compensated. We look forward to working with the government to implement this important reform,” Mr Locke continued.
AFCA was established on 1 November 2018 and is a one-stop-shop that consumers and small business owners can use free of charge, for fair, independent and effective solutions to their financial disputes.
“The announcement from the Government today that AFCA will now be able to consider some of the legacy disputes excluded by the predecessor schemes going back to 1 January 2008, means that many more people will be able to get access to justice and have their matters properly considered. This is a really positive step for consumers and we will be issuing guidance shortly to assist people to bring these disputes to us,” Mr Locke said.
AFCA also welcomes the Commissioner’s recommendation in respect of section 912A of the Corporations Act 2001, to require that Australian Financial Services Licence holders take reasonable steps to cooperate with AFCA in its resolution of complaints, by making available to AFCA all relevant documents and records relating to issues in dispute. This will enhance AFCA’s effectiveness as an independent external dispute resolution scheme for consumers and small businesses.
The Government announced that AFCA will also play an increased role in relation to remediation schemes that are run to compensate consumers. Mr Locke also welcomed this: “AFCA already has considerable experience of working on remediation schemes, and where we are involved at an early stage we are able to ensure that these are designed and implemented in a way that delivers fair outcomes for consumers. We welcome an increased role in this important work.”
AFCA will continue to work with our members to improve standards and minimise disputes, improving practices and achieving fair, timely outcomes for consumers and small businesses.
AFCA is firmly on the side of fairness and we believe that ensuring fair outcomes for consumers is a critical first step to rebuilding trust and confidence in financial services.
A full statement can be found on the AFCA website: https://www.afca.org.au/news/latest-news/afcas-response-to-the-royal-commission-final-report/.
Published: 4 February 2019
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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.