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Industry and regulatory bodies have welcomed the establishment of the Australian Financial Complaints Authority (AFCA), which passed through parliament yesterday (14 February).
AFCA will provide a single scheme in resolving disputes with banks, insurers, super funds and small amount credit providers.
The government has labeled it as a "one-stop shop" as it will merge the three existing complaints bodies.
Welcoming AFCA's creation, ASIC said yesterday that the new body will be the culmination of more than 20 months of public consultation and inquiry.
"Fair, timely and effective dispute resolution is a cornerstone of the financial services consumer protection framework. The combination of firms' internal dispute resolution procedures and access to a free independent external scheme currently provides redress for many tens of thousands of Australians each year," said ASIC deputy chair Peter Kell.
He said the establishment of a single scheme for all financial services and superannuation complaints builds on the outcomes achieved over many years by the existing three schemes: the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal (SCT).
FOS itself has welcomed the passing of the AFCA legislation, saying that it provides certainty about the future of dispute arrangements for the financial sector.
“The establishment of AFCA will simplify, strengthen and increase access to free external dispute resolution for individuals and for small businesses,” said FOS chief ombudsman Shane Tregillis.
ASIC said it will work to ensure the transition to the commencement of AFCA is as smooth as possible. Meanwhile, it will retain direct oversight of its two approved schemes: FOS and CIO.
It said that separate arrangements are in place for the operation of SCT to enable it to deal with existing complaints.
The Australian Bankers’ Association calls the passage of AFCA through parliament a big win for Australian bank customers.
“Merging three complaints authorities into a ‘one stop shop’ is common sense reform and should lead to speedier resolution of issues experienced by Australian bank customers,” said its CEO Anna Bligh.
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