The terms of reference for the federal government review of the Australian Financial Complaints Authority (AFCA) have been released.
Under the terms of reference, three areas have been targeted for assessment, including the body’s effectiveness to date measured against its statutory objective and if an internal review mechanism is needed.
The process of determining if AFCA is meeting its statutory objectives will be based upon whether the body has resolved the disputes it has handled to date in a fair, efficient, timely and independent manner.
Also to be considered is if there is a need for AFCA to have an internal mechanism where the substance of its decisions can be reviewed and how any such mechanism should operate to make sure consumers and small businesses have access to timely decisions by the authority.
The review is required as part of the Treasury Laws Amendment (Putting Consumers First – Establishment of the Australian Financial Complaints Authority) Act 2018, which dictates the operation of the complaints body and will enable the government to evaluate whether it is effectively meeting the needs of users and its members.
Treasury will conduct the review with a resulting report expected to be finalised on 30 June.
All interested parties have been invited to make submissions to the review via the Treasury website, with the consultation process set to end on 26 March.
Interested parties have been encouraged to include specific examples and case studies in their submissions and have been granted permission to omit any personal details of complainants and case reference numbers for reasons of confidentiality.
AFCA welcomed the release of the terms of reference for its review today.
“The establishment of AFCA represented significant reform of financial services complaints resolution in Australia,” AFCA chief executive David Locke said.
“We are proud of all that AFCA has achieved in the space of two years. AFCA welcomes the opportunity to make a submission and put forward our views of how external dispute resolution for the financial services industry can be further improved.”
AFCA was established in November 2018 and since its inception has received over 150,000 complaints and secured over $650 million in compensation and refunds for consumers and small businesses via its dispute resolution processes.
The complaints body last week recognised the financial advice being provided to SMSF clients was of a very high standard.