New AFCA Fee Model – Licensees More Inclined to Defend Complaints


The AFA is supportive of the new AFCA fee model and particularly the five free complaints each year which it expects will lead to more licensees deciding to defend a complaint.

AFA CEO Phil Anderson says one important thing that will flow from the five free complaints “…is that licensees will be more inclined to defend complaints where they believe that they lack merit as they will no longer choose to settle on the basis of avoiding the higher AFCA costs that will arise as a result of persisting with defending the matter.”

(See: AFCA Fees – Majority of Firms to Pay Same or Less.)

Phil Anderson.

He says this is an important outcome “…as often the increased AFCA cost involved in defending a complaint for a relatively small amount, like a fees complaint, would exceed the cost of reaching an early settlement.”

Anderson adds this will engender more confidence in the overall complaints process.

He notes too that AFCA suggesting many small businesses will have a cost reduction, “… is a great outcome for the many advice licensees who do not get any complaints. We also welcome the rationalisation of the charging model.”