The Mortgage and Finance Association of Australia (MFAA) has responded to the Australian Financial Complaints Authority (AFCA) after some brokers were served with pre-expulsion notices by the regulator.
Brokers who received the notices did so over the issue of unpaid invoices, which the MFAA described as causing ‘distress’ for brokers.
“The MFAA is aware that some members have received pre-expulsion notices from the Australian Financial Complaints Authority (AFCA) in relation to outstanding invoices that AFCA maintains are unpaid,” wrote the peak body.
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“We understand that receiving a notice of this nature will have caused a great deal of distress for those concerned and particularly given the short notice period and potential consequences of being expelled as a member of AFCA.”
“The MFAA have contacted AFCA and specifically raised concerns that some members have reported receiving a pre-expulsion notice despite having paid the amounts in question or not having received prior notices. We have also raised concerns regarding the very short 7-day notice period for what is an extreme action and suggested that greater notice should be given.”
“AFCA have advised that the pre-expulsion notice is the fourth and final notice in the process (with the invoice, 30-day notice and 60-day notice being the others) and in accordance with AFCA’s Constitution these notices are required to be provided prior to meeting of AFCA’s Board of Directors.”
“AFCA further noted that payments may not have been allocated properly for several reasons. These reasons include that reference numbers were not included when the payments were made, and that AFCA may not hold members’ most updated contact details.”
“Whilst AFCA will not be providing an extension in this instance, we have been informed that they will be reviewing their correspondence and process in due course and will consider our recommendation as part of that review.”
“As some of our members have reported not receiving communication prior to the pre-expulsion notice we have provided examples to AFCA which they are investigating as a priority.”
AFCA say that the pre-expulsion notices are the fourth and final notice, with the invoice serving as the first, followed by the 30 and 60 day follow ups.
The MFAA added that they encouraged members to ensure that all invoices were paid by November 11 2021, and that those who had paid but were still served notices should contact AFCA urgently.
