The federal government has called for feedback for its proposed one-stop shop for external dispute resolution (EDR), the Australian Financial Complaints Authority (AFCA).
A consultation paper by Malcolm Edey, chair of AFCA’s transition team, was released on Friday (2 November) to outline the terms of reference for the body and how it would differ from the three current ombudsman schemes, the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO), and the Superannuation Complaints Tribunal (SCT).
Four guiding principles have been proposed including compliance with all necessary requirements, incorporation of better dispute resolution practices, adoption of current practices that have already been deemed useful, and transitional arrangements that are efficient and effective.
The following changes have been proposed around how the scheme will be set up:
- AFCA will be given higher monetary limits and compensation caps than existing EDR schemes
- A consistent approach to decision making will be utilised to ensure predictability across both financial and superannuation disputes
- AFCA will use an expert panel when appropriate with exact cases specified beforehand
- The body will commission independent reviews approved by ASIC on its operations and procedures
- AFCA will fall under the guidance of an independent assessor to review the body’s decisions as well as complaints about AFCA itself
- Areas that fall outside of AFCA’s jurisdiction should be clearly outlined
AFCA’s board will consist of an independent chair and equal numbers of directors experienced in industry or consumers. Feedback has been asked on how these board members will be selected and where their responsibilities will lie.
Finally, the consultation paper also covers how AFCA will be funded as well as transparency and accountability. The paper can be seen on the Treasury website with the government taking submissions up until 20 November.
“I encourage all interested parties to engage with Dr Edey and the Transition Team to ensure that AFCA provides enhanced access to redress, while being accountable and transparent to both industry and consumers,” said Minister for Revenue and Financial Services, Kelly O'Dwyer.
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