Some of the key features of AFCA include:
- The ability to hear consumer complaints where the value of the dispute is less than $1 million and the ability to award compensation of up to $500,000 – almost double the existing limits of FOS and CIO;
- In the case of small business credit complaints, the ability of small businesses to have their complaint heard where it relates to a credit facility of less than $5 million and be eligible for compensation of up to $1 million – almost triple the existing limits of FOS and CIO;
- In the case of a small business primary production dispute, the ability to award compensation of up to $2 million; and
- The retention of an unlimited monetary jurisdiction for superannuation complaints.
Treasurer Josh Frydenberg said AFCA represents a new era for financial dispute resolution, delivering free, fast and binding services for all financial complaints, whether they be related to banks, credit providers, insurance companies or superannuation funds.
“Consumers and small businesses will benefit from having increased access to redress as AFCA will have significantly higher monetary limits and compensation caps than were available under the Financial Ombudsman Service (FOS) and Credit and Investments Ombudsman (CIO),” Mr Frydenberg said.
“Its launch overhauls Australia’s financial dispute resolution system, bolstering community confidence by providing consumers who have suffered a loss with greater access to free and fair dispute resolution.”
The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, said she hopes to see a significant reduction in the number of small businesses winding up in court as a result of AFCA.
“With Australian Securities and Investments Commission oversight, the AFCA will provide free, fast and binding dispute resolution to small businesses, saving them time and money by significantly reducing the need for litigation,” Ms Carnell said.
“It will also possess the expertise to deal with small business lending disputes, significantly improving small business access to justice and providing the forum where the needs of small business are understood.”
In May, the government committed $1.7 million to support AFCA’s establishment, as part of the 2018-19 budget.
