The Australian Securities and Investments Commission (ASIC) has moved to force nearly 60 financial services licensees to either join the new single entity industry complaints scheme or face the cancellation of their licence.
ASIC took the action after being informed by the Australian Financial Complaints Authority (AFCA), which began operations on 1 November 2018, that 58 financial services licensees that had held membership with one of the previous complaint schemes had not obtained AFCA membership and they may be in breach of their licence obligations.
AFCA membership is compulsory for all Australian financial service licence (AFSL) holders and replaces membership of the Financial Ombudsman Service, the Credit and Investments Ombudsman, and the Super Complaints Tribunal. The tasks and responsibilities of those three bodies were rolled into AFCA, which also deals with legacy cases from the three schemes.
As a result of ASIC’s actions, 50 financial services licensees obtained AFCA membership, four financial services licensees voluntarily cancelled their licences and four financial services licences were cancelled or suspended by the corporate regulator.
The regulator also took action against 217 credit licensees, with 131 credit licensees obtaining AFCA membership, 38 credit licensees voluntarily cancelling their licences and ASIC cancelling or suspending 48 credit licences.
“ASIC has taken proactive measures to protect consumers from those few financial services licensees and credit licensees who were not complying with the obligations of their licence by being a member of AFCA,” ASIC commissioner Sean Hughes said.
“ASIC’s intervention means that consumers now have access to the independent dispute resolution scheme of AFCA if their complaints are not being properly considered by the financial services licensee or credit licensee.”