Business News, Financial Planning

AFCA extends dispute timeframes

AFCA dispute timeframes

AFCA has extended the timeframes for financial advice providers to respond to a dispute as part of its response to COVID-19.

The Australian Financial Complaints Authority (AFCA) has extended the timeframes for financial services providers to respond to a complaint and in which to provide further information related to a dispute.

The complaints authority announced that instead of having 21 days to respond when AFCA notifies them that a complaint has been lodged, financial services providers will now have 30 days as part of temporary extension measures.

The measures, which have been introduced due to the COVID-19 pandemic, also include a flat 21-day time frame for organisations to provide an initial response after a dispute reaches the case management stage.

Previously this figure had been seven days for simple cases and up to 21 days for more complex cases, according to complaint resolution processes published on AFCA’s website.

Despite the extended response time frames, the AFCA processes indicate the authority has not extended the time in which it expects cases to be resolved, with case management still listed as six weeks for simple cases and eight to 12 weeks for more complex matters, which includes the case management and adjudication/decision-making periods.

The extensions come into effect immediately, will apply to all complaints and be in place for up to six months, but will be reviewed and adjusted as appropriate. Internal dispute resolution processes offered by providers will not have any extensions.

AFCA chief executive and chief ombudsman David Locke said the authority had worked with ASIC to get the extension, which allowed financial services providers more time to resolve issues internally.

“We have worked with ASIC to get an extension to the time financial firms have to respond to complaints that have already been through internal dispute resolution processes,” Locke said.

“This extension allows financial firms more time to resolve disputes with their customers, without the need to come to AFCA for an external dispute resolution service.

“This recognises the pressure some parts of the financial services industry are under, with unprecedented levels of customer queries and financial hardship requests. It also gives consumers more realistic expectations about when they will get a response.

“Where the parties are unable to resolve complaints by themselves, the extension provides more time to do things like find the documentation required by AFCA.”

AFCA’s extensions follows new relief measures from ASIC around the provision of advice related to early access to superannuation with the regulator relaxing requirements to issue a Statement of Advice or hold an Australian financial service licence for some advice practitioners.

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