Consumers with grievances against their financial institutions dating back to the period covered by the Hayne Royal Commission have an opportunity to lodge complaints with the Australian Financial Complaints Authority, following a move to extend the ombudsman’s jurisdiction.
The Australian Securities and Investments Commission has approved changes to the AFCA rules to allow it to deal with complaints dating back to 2008.
AFCA’s mandate will be extended for 12 months to allow it to deal with issues raised in the Hayne Royal Commission. Consumers who may have been alerted to issues of misconduct raised in Royal Commission hearings have a 12-month window to take their case to AFCA.
ASIC says AFCA will be able to deal with complaints about conduct by current member financial firms, which AFCA, its predecessor schemes, courts or tribunals have not previously dealt with.
Complaints must be lodged between 1 July 2019 and 30 June 2020.
Under normal circumstances, AFCA can only deal with matters that have occurred within the past six years. When a complaint has been through a financial service provider’s internal complaints process, the timeframe is reduced to two years.
The Financial Planning Association has raised concerns about the extended mandate. It says it is unclear whether AFCA’s rulings under the expanded mandate will be based on the law, codes, guidance and best practice that were in force at the time the conduct occurred, or whether current standards would apply.
ASIC says: “The new jurisdiction may raise novel issues about how AFCA deals with complaints. If these issues require or necessitate material changes to the scheme, then ASIC will need to review these as part of our ongoing oversight role.”
AFCA has the authority to award compensation of up to $2 million when dealing with credit disputes and will have jurisdiction in matters where the credit facility is up to $5 million. Iy has jurisdiction on life and general insurance policies worth up to $1 million and can award up to $250,000 in disputes over life policies.
There is no monetary limit on the amount that may be awarded to a complainant in a superannuation complaint.