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5.7 Australian Financial Complaints Authority

Financial firms must have a dispute resolution system that consists of internal dispute resolution (IDR) procedures that meet the standards or requirements made or approved by ASIC, as well as membership of AFCA.

AFCA commenced operations on 1 November 2018. It deals with financial services, credit and superannuation complaints made by consumers, small businesses and primary producers. AFCA replaced two ASIC-approved industry-based schemes, the Financial Ombudsman Service and the Credit and Investments Ombudsman, as well as the statutory Superannuation Complaints Tribunal. AFCA retains many key features of the previous schemes but has an expanded small business and monetary jurisdiction.

In 2019–20, AFCA’s first full financial year of operations, it received 80,546 complaints, a 13.7% increase from 2018–19. It secured $258.6 million in compensation to consumers and small businesses.1

Like other participants in the financial system, AFCA pivoted its operations to respond to the COVID-19 pandemic. It received 4,773 complaints relating to the pandemic, with the majority of these involving general insurance, particularly travel insurance.

As an authorised EDR scheme, AFCA is governed by an independent board responsible for ensuring the scheme’s ongoing compliance with the authorisation requirements, ministerial conditions and ASIC regulatory requirements.

The Corporations Act gives ASIC a range of powers in relation to AFCA, including requiring that ASIC approve material changes to the scheme.

This year, ASIC approved material changes to the AFCA Rules to:

  • enable AFCA to name firms in published decisions
  • temporarily extend the timeframes for financial firms to respond to complaints that have already been through IDR in response to the COVID-19 pandemic
  • give effect to an additional condition on the AFCA scheme authorisation, introduced by the Government under its COVID-19 pandemic relief measures, which limits how AFCA deals with certain small business complaints.

In accordance with legislative requirements, AFCA reported 92 systemic issues to ASIC in 2019–20. AFCA also reported possible serious contraventions and shared information with ASIC under applicable statutory requirements and provisions of the AFCA scheme Rules.

Other issues affecting AFCA include the Government’s consultation on implementing the Royal Commission measure to establish a compensation scheme of last resort, and ASIC’s updated requirements about how financial firms deal with consumer and small business complaints under their IDR procedures, in Regulatory Guide 271 Internal dispute resolution (RG 271). Our updated standards and requirements will come into effect on 5 October 2021 and will drive fair and timely complaint outcomes for consumers and sharpen industry’s focus on systemic issues.

For more information about ASIC’s monitoring of remediation programs, see Chapter 2.


  1. 1 This includes matters previously received by AFCA’s predecessor, the Financial Ombudsman Service, and resolved by AFCA since 1 November 2018.