A Changing of the Guard – Financial Ombudsmen Service (FOS) soon out and Australian Financial Complaints Authority (AFCA) coming soon (1 November 2018)
The Australian Financial Complaints Limited (AFCL) has received authorisation from the Minister for Revenue and Financial Services, the Hon. Kelly O’Dwyer, to establish and operate the Australian Financial Complaints Authority (AFCA).
Under the Minister’s Authorisation, AFCA will commence accepting new complaints on 1 November 2018. All financial firms will be required to be a member of AFCA by no later than 21 September 2018. Ninety-eight percent of current members of the Financial Ombudsman Service (FOS) have already completed the annual assessment and member declaration to ensure a smooth transition to AFCA.
AFCA will, over the next few months, be putting in place the necessary infrastructure, staff and procedures to be ready to receive complaints from 1 November 2018.
In the interim, AFCA will operate the FOS scheme and will deal with any existing FOS disputes under the current FOS Terms of Reference. The operations of FOS, including staff and members will be transferred to AFCA.
The AFCA Board will also continue working with the Credit and Investments Ombudsman (CIO) Board on the necessary arrangements for a transfer of its members and operations to AFCA. There will also be ongoing collaboration with the Superannuation and Complaints Tribunal (SCT) during the transition process.
One of the early actions of the new AFCA Board is said to be to consult stakeholders, including current FOS members, CIO members and superannuation trustees, relevant industry bodies and consumer organisations, on the proposed AFCA terms of reference (to be known as the Rules) and on an interim funding model for the new scheme. I will write over the next month with further information on these consultations which are currently planned to commence in June 2018.
An interim AFCA website – www.afc.org.au – is already up and going to enable the Authority to provide regular information and updates on the commencement of AFCA, including information about consultation on the AFCA Rules. Information is also available on the FOS website.
It is reported that a full service AFCA website will be ready by the commencement date of 1 November 2018.
If anyone has any questions regarding membership of Australian Financial Complaints Authority or any other questions regarding AFCA commencement, it is recommended you call them on 1800 931 678 or email firstname.lastname@example.org.
For my part, I will watch the new organisation with interest. General Insurance is so complex and many of us fear that well established legal precedents including the application of the Insurance Contracts Act will not be followed as we have seen far too often of late in the current organisation when those making the decisions are not sufficiently trained or experienced in the industry. With a mega body handling so many different types of financial products this issue may get worse not better.
The second issue is, will the new Authority publish the data on complaints that FOS currently provide annually? This is an important service that I for one would hate to see disappear or get mixed in with a bigger unintelligible report in the new mega Authority.
But to be fair, we need to all give the new Authority every chance and we wish them every success in their very important role.