Background about AFCA
AFCA is an external complaints resolution scheme which resolves complaints about financial firms.
AFCA can consider complaints made about credit, finance, insurance, banking deposits, investments financial advice and superannuation however it has rules that govern the types of complaints that can be considered and those that cannot. For example, AFCA will not consider complaints about the level of a fee charged unless fees were incorrectly calculated or charged, or they were not in line with information disclosed by the financial firm.
AFCA may only consider complaints made by an eligible person about a financial firm that is an AFCA Member at the time of the complaint. In most cases, AFCA's decisions are binding on a financial firm if the complainant accepts AFCA’s decision.
Changes to time limits - COVID-19 Relief Measures
On 16 April 2020, AFCA announced temporary changes to give consumers, small businesses, and financial firms extra time to respond to complaints. AFCA has stated that the changes will be in place for up to six months and may be reviewed and adjusted.
The temporary measures do not alter the overall process that AFCA will follow when dealing with complaints - the amendments only change timeframes for some of the steps in the process.
The AFCA complaint resolution process map which includes required timeframes for each step during the COVID-19 period can be accessed here: https://www.afca.org.au/media/740/download
Example: A client believes their adviser did not adequately disclose the costs of breaking a term deposit. The client complains directly to the adviser, but the client is dissatisfied with the adviser’s response. The client then complains to AFCA. If AFCA assesses the complaint as being a single issue, low value complaint then the complaint would be treated as a ‘Fast Track’ complaint which would mean under standard rules AFCA would allow only 7 days for the provision of any additional information by either the complainant or the AFSL but under the COVID-19 temporary relief, it will now allow 21 days.
AFCA has stated that it encourages financial firms to continue to:
Please contact us if you need assistance with an AFCA complaint.
Date of article - June 2020
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