As many of you will know, legislation to establish the Australian Financial Complaints Authority (AFCA) passed Parliament on 14 February 2018. AFCA will provide a single external dispute resolution option for consumers by replacing the three existing external dispute resolution schemes: the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and Superannuation Complaints Tribunal (SCT).
On 1 May 2018 a new operating company, Australian Financial Complaints Limited (AFCL), replaced the Financial Ombudsman Service Limited (FOSL) as the legal entity running the FOS scheme until AFCA commences accepting new disputes on 1 November 2018. We have ASIC’s approval for this new arrangement.
We are progressing on schedule with our change over to AFCA, and have reached a few important milestones. Most significantly, on 1 May 2018, AFCL received authorisation from the Minister for Revenue and Financial Services to establish and operate AFCA.
Under the Minister’s Authorisation, AFCA will commence accepting new complaints on 1 November 2018. All financial firms required to hold membership of an external dispute resolution scheme will be required to join AFCA by no later than 21 September 2018. Ninety-eight percent of current FOS members have already completed the annual assessment and member declaration to ensure a smooth transition to AFCA.
AFCA will be governed by a board of 11 directors. The Minister has appointed Helen Coonan as the inaugural AFCA chair. The other board members are:
|Role ||Name |
|Independent Chair ||The Hon Helen Coonan |
|Industry Directors ||Mr Robert Belleville |
| ||Ms Jennifer Darbyshire |
| ||Ms Claire Mackay |
| ||Ms Johanna Turner |
| ||Mr Andrew Fairley AM |
|Consumer Directors ||Ms Carmel Franklin |
| ||Ms Elissa Freeman |
| ||Ms Catriona Lowe |
| ||Ms Erin Turner |
| ||Mr Alan Wein |
We will continue to work with Treasury, ASIC and all stakeholders over the coming months to enable AFCA to be ready to operate by 1 November. Until then, it is business as usual. Any FOS disputes that are still open at the time AFCA commences will be handled under the existing FOS Terms of Reference.
All new disputes received after AFCA commences will be handled under the new AFCA Rules, which will incorporate the new claims limits and compensation caps previously announced by the government.
We are planning a number of events for our members and community advocates (including financial counsellors) throughout 2018 as AFCA takes shape. Please make sure you keep your contact details up to date with us, so we can contact you with important information as it becomes available.
If you have any questions in the meantime, the FOS website has a dedicated AFCA page that includes Frequently Asked Questions. You can also contact [email protected] if there are particular aspects of the transition you would like to discuss in more detail or if you have further questions.