May 14th, 2018
In September, the Federal Government introduced the Treasury Laws Amendment Bill 2017 (Putting Consumers First – Establishment of the Australian Financial Complaints Authority). The purpose of this bill is to establish a single new external dispute framework for the financial sector, creating a ‘one-stop-shop’ for all financial disputes to replace three existing financial sector external dispute resolution (EDR) bodies.
The new Australian Financial Complaints Authority (AFCA) is designed to provide enhanced redress for consumers and small business, and to specifically address problems with the multiple EDR scheme framework which have caused confusion for consumers and has resulted in different outcomes between schemes for similar complaints. With the new AFCA scheme, the Government also aims to eliminate duplicate costs for the finance industry.
What will change and when?
How will this change affect you and your business?
ASIC will require all Australian Credit License holders and all Credit Representatives to maintain and comply with their existing external dispute resolution requirements until AFCA is established and commences its responsibilities on 1 November 2018. ASIC will work with us to ensure there is a smooth transition from CIO and FOS to the new scheme. Until then, please bear in mind the following:
What are the next steps?
Your Compliance Team will be monitoring the situation closely and we’ll keep you updated on any developments, changes or additional requirements as soon as they become known. Please keep an eye out for our emails instructing you on how and when to join AFCA – it’s very important that your application is lodged in plenty of time before the hand-over.
Remember, prior to 1 November 2018 you must continue with your existing CIO or FOS membership, as they will continue to accept complaints from consumers up to and including 31 October 2018. Under no circumstances may you have no external dispute resolution scheme in place – this is very important.
If you have any questions, the Compliance Team is here to help. Simply click on your help icon in Mercury and select Compliance, or just email us directly at firstname.lastname@example.org