The Financial Ombudsman Service (FOS) will be rolled into a single industry complaints service with a monetary limit of $1 million and in which all Australian Financial Services Licensees (AFSL) will be required to be a member.
The new service – the Australian Financial Complaints Authority (AFCA) – will merge FOS with the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal, and is the result of the Federal Government accepting all 11 recommendations of the Ramsay Review.
The Review, which examined external dispute resolution systems in financial services, was delivered on 3 April 2017 and called for the creation of a single body with monetary limit of $1 million and a compensation cap of $500,000, and decisions to be binding on all AFSL members.
The new service… will merge FOS with the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal
Federal Treasurer, Scott Morrison announced the creation of AFCA as part of his 2017 Budget speech, including its initial funding of $4.3 million over the first four years. These funds would be channelled through ASIC which will oversee AFCA and require AFSLs to report on their own internal dispute resolution activity.
In a media statement Morrison said AFCA would deal with all financial disputes, including superannuation disputes and be governed by an independent board, with an independent chair and equal numbers of directors with industry and consumer backgrounds.
