The nine-day extension comes into effect immediately and will apply to all complaints, including those relating to financial difficulty. Financial firms currently have 21 days to respond when AFCA notifies them that a complaint has been lodged, they will now have 30 days.
AFCA is also providing as standard, a flat 21-day time frame to provide an initial response, once the dispute reaches the case management stage.
AFCA CEO and chief ombudsman David Locke said AFCA is aware of the difficult circumstances financial firms and the community are facing, and the extension ensures all parties involved had sufficient time to work together to resolve the complaint.
“AFCA has been talking to key stakeholders and has heard the complexities facing financial firms, small business and consumers in the current environment,” Mr Locke said.
“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. Financial firms now have 30 days to respond, up from 21 days.”
According to AFCA, 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,” said Mr Locke.
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.
“From a consumer perspective, it is important to note that if a financial difficulty case has been brought to AFCA, then in most cases, no enforcement action can be taken while the matter is with us,” said Mr Locke.
The changes are a temporary measure that AFCA anticipates will be in place for up to six months and will be reviewed and adjusted as appropriate. All internal dispute resolution refer back time frames remain unchanged.
