From 1 July 2019, AFCA will review eligible complaints dating back to 1 January 2008.
The Federal Government has extended the remit of the Australian Financial Complaints Authority (AFCA) to review eligible financial complaints dating back to 1 January 2008.
Following approval by the Australian Securities and Investments Commission (ASIC), AFCA’s remit will be expanded for a period of 12 months, allowing AFCA to consider eligible complaints between 1 July 2019 and 30 June 2020.
The move was welcomed by the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, who described the extension as a step in the right direction.
“AFCA currently only takes complaints going back six years,” said Ms Carnell. “From 1 July 2019, small businesses with complaints about loans under $5 million, going back to 1 January 2008 and who haven’t had their case heard by the Financial Ombudsman Service or a court, will have one year to apply to AFCA to review their case.”
AFCA Chief Ombudsman and Chief Executive Officer, David Locke said AFCA will work with all stakeholders to implement these changes fairly and effectively.
“We believe that this will provide access to justice and redress to many thousands of Australian consumers,” Mr Locke said.
“In most cases, we are currently only able to consider matters that have occurred within the last six years. When a complaint has been through a financial firms’ internal dispute resolution process, this timeframe is reduced to two years. This change means that many more people will be able to get access to justice and have their matters properly considered.”
Financial limits to remain in place
Although AFCA is a non-government organisation, it has been approved by the Federal Government to administer an independent dispute resolution scheme that is free and fair.
In considering complaints about financial products and services, AFCA’s service provides an alternative to tribunals and courts to resolve complaints that small businesses and individual consumer have with their financial firms.
Ms Carnell said the upper limit of $5 million restricts businesses’ ability to lodge complaints. “It is unfortunate that AFCA is bound by the $5 million limit as we know of a range of cases where the small business loan was over this amount and those businesses have nowhere to go - no access to justice,” she said. “These businesses don’t have the resources to take financial misconduct to court and they deserve justice too.”
“We will continue to put pressure on the government to adopt recommendations from Ramsay’s supplementary report on a scheme for these small businesses that includes options such as an independent forum to hear past disputes or government supported legal funding.”
Mr Locke said further guidance will be issued prior to 1 July 2019 to explain how small businesses and consumers can raise their matters with AFCA.
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