The Treasury Laws Amendment (Putting Consumers First – Establishment of the Australian Financial Complaints Authority) Bill passed through the federal Senate on Wednesday.
Minister for Revenue and Financial Services Kelly O’Dwyer and Minister for Small and Family Business Craig Laundy said that the new body would give consumers and small businesses access to “free, fast and binding dispute resolution”.
"AFCA will provide a one-stop shop to ensure consumers get a fair deal in resolving disputes with banks, insurers, super funds and small amount credit providers, without the expense, inconvenience and trauma associated with going to court," Ms O'Dwyer said.
ASIC has also welcomed the establishment of the new body, and deputy chair Peter Kell said the establishment of a “single scheme for all financial services and superannuation complaints” was a “very positive development” that built on the Financial Ombudsman Service, the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal.
“Fair, timely and effective dispute resolution is a cornerstone of the financial services consumer protection framework,” Mr Kell said.
“The combination of firms' internal dispute resolution procedures and access to a free independent external scheme currently provides redress for many tens of thousands of Australians each year.
“Strengthening these dispute resolution requirements will help deliver higher standards and better outcomes in the financial services market.”
Australian Bankers’ Association chief executive Anna Bligh said it was “in everyone’s best interest” to have speedy dispute resolution.
“Merging three complaints authorities into a ‘one-stop shop’ is common sense reform and should lead to speedier resolution of issues experienced by Australian bank customers,” Ms Bligh said.
AFCA will begin to receive disputes “no later” than 1 November 2018, and the Australian government is taking proposals from not-for-profit companies to operate the new body, which are to be lodged by 15 March 2018.
However, CIO chief executive Raj Venga said in August 2017 the AFCA regime would be ineffective and expensive, formally boycotting the government's transition into the new scheme.
“CIO has declined an invitation from the Minister for Financial Services to join an expert reference panel charged with working through the transition process for its proposed ‘one-stop shop’,” Mr Venga said.
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