The government’s proposed one-stop shop dispute resolution body, the Australian Financial Complaints Authority (AFCA), has passed the Senate with expectations it will commence operation in the second half of next year.
The body will replace the three existing dispute resolution agencies, the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal (SCT).
Minister for Revenue and Financial Services Kelly O’Dwyer said that AFCA will give more Australian consumers and small businesses access to free, fast and binding dispute resolution processes.
The Bill passed with support from the crossbench, despite opposition from Labor and the Greens who sought to exclude superannuation from AFCA’s remit.
“AFCA is a landmark reform that will overhaul how financial disputes are dealt with in Australia. It will operate under significantly higher monetary limits and compensation caps,” O’Dwyer said.
Consumers and small businesses will have access to up to $2m in compensation under the new scheme.
A number of minor amendments were added to ensure the passage of the Bill, including providing additional certainty around superannuation disputes and legislation guaranteeing the independence of the new body. A review of AFCA’s operations will also be held 18 months from its commencement.
O’Dwyer thanked Ian Ramsey, Julie Abramson and Alan Kirkland who assisted with the External Dispute Resolution Review as well as other stakeholders who played a role in the development of the new body.
“I encourage all interested parties to continue to engage with Dr Edey and the Transition Team who are overseeing the transition from the existing schemes to AFCA. Continued engagement will ensure that AFCA will provide better outcomes for consumers, while being accountable to all stakeholders.”
The Bill will now proceed back to the House of Representatives for final passage.
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