Financial products: got a gripe?
From time to time your business or a client may have dealings or issues with an Australian Financial Services Licence (AFSL) holder.
The Australian Financial Complaints Authority (AFCA) was founded in November 2018 and is the impartial and independent dispute resolution scheme for financial services, specifically relating to financial products and services.
AFCA considers complaints that were previously handled by the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal.
Being proactive with issues, speaking to an adviser and advising AFCA promptly will ensure a well-rounded strategy is formulated to minimise loss.
How can AFCA assist you?
AFCA’s role is to assist consumers and small businesses to reach agreements with financial firms about how to resolve complaints.
It is compulsory for all licenced financial services providers in Australia to be an AFCA member and to participate in the AFCA process.
You can lodge a complaint with AFCA if you believe that a financial services provider:
- Misled you about a product or service you obtained from them
- Breached a law, duty or code of conduct
- Did not assist you in relation to financial hardship experienced
- Did not advise you of fees, charges, etc or made a calculation error.
You should attempt to resolve any issues before making a formal complaint through AFCA and you may need an advisor to assist. Be aware that there are time limits for making a complaint to AFCA, as follows:
- Within 6 years after you first became aware that you have suffered the loss you want to complain about
- Within 2 years after receiving a response from the financial services provider through its internal dispute resolution process.
In the first instance, once a complaint is lodged, AFCA will attempt to resolve the complaint and reach a commercial settlement between you and the financial services provider. If this is not successful, there are other remedies that AFCA can provide including, amongst others:
- Undertaking a course of action
- Various financial remedies, including payment of money
- Varying credit contracts.
If AFCA cannot resolve the complaint/matter, there are other places you may be able to go for assistance. The financial services provider bears the costs of the AFCA process, so there is no outlay on your behalf.
What doesn’t AFCA cover?
AFCA generally cannot consider complaint that:
- Has already been dealt with by a Court, Tribunal or a Predecessor Scheme
- Has a claim with a value exceeding $1 million
- Has previously been dealt with by AFCA and there are insufficient additional events\
- Relates to a complainant that is a member of a group of Related Bodies Corporate and that group has 100+ employees
- Relates to professional accountancy services provided by an accountant
- Relates to a Privacy Act participant
- Relates to the general level of fees, charges, interest rates, etc., applied by a financial firm in a competitive open market.
When lodging a dispute with a licence holder in relation to a financial product, consider whether you have sufficient evidence under the dealer’s insurance arrangements, that your dispute has been notified to their insurer and their insurance is current.
Most policies are on a ‘claims made’ basis therefore, if not notified, you may miss out if this is the end or only solution to recovering compensation.
How can Cor Cordis assist?
If you require further information or would like a confidential discussion, please contact one of our partners at our office near you.