20 February 2019

Taking action on the Banking, Superannuation & Financial Services Royal Commission - Going further by requiring AFCA to extend its remit

The Coalition Government has extended the Australian Financial Complaints Authority’s (AFCA) remit to consider financial complaints dating back to 1 January 2008, providing expanded access to redress for consumers and small businesses harmed by financial misconduct.

The Royal Commission considered cases of financial misconduct dating back to 1 January 2008. As a result of today’s direction, AFCA’s remit will be expanded to enable them to review eligible complaints over the same period.

AFCA will consider eligible complaints between 1 July 2019 and 30 June 2020.

The Government established AFCA – a one-stop-shop for external dispute resolution – to enable more consumers and small businesses to access a free, fast and binding service for financial complaints, whether they relate to banking, superannuation, insurance or financial advice.

As a result of this direction, AFCA will be able to consider disputes dating back to 1 January 2008 that have not previously been heard and which fall within AFCA’s current monetary limits and compensation thresholds.

Current compensation thresholds are:

  • $500,000 for consumers;
  • $1 million for small businesses; and
  • $2 million for primary producers.

To give effect to the direction, AFCA will now consult on updating its rules so that it is in a position to begin receiving complaints under its expanded remit from 1 July 2019.

The Coalition Government is taking action on all 76 recommendations contained in the Royal Commission’s Final Report and, in a number of important areas such as expanding AFCA’s remit, is going further.

Restoring trust in Australia’s financial system is part of the Coalition Government’s plan for a stronger economy.