Consumers, including charities, often have difficulty settling disputes with firms in the financial services industry. If your charity has a complaint, it will now be easier to reach a satisfactory resolution. Beginning on the 1 November, any registered charity will now be able to resolve financial claims and disputes free of charge.

What AFCA Means for Registered Charities

AFCA will be led by the ACNC’s former assistant commissioner, David Locke, who will be the chief ombudsmen and CEO of the Australian Financial Complaints Authority (AFCA).

AFCA replaces three other bodies that are currently working to resolve financial disputes, which are the Credit and Investments Ombudsmen, the Financial Ombudsmen Service Australia and the Superannuation Complaints Tribunal. The new authority will have higher threshold limits than the existing three mediating bodies, which will significantly increase the number and types of complaints that AFCA can mediate.

AFCA’s determination in the complaints lodged by ACNC registered charities will now be legally binding upon the firms in question, providing much-needed relief to charities and the individuals that rely on them for services and other assistance.

Avoid Costly Lawsuits

This new resolution body provides a means of seeking justice in complaints involving insurers, banking institutions, and super funds without having to endure the time and expense required in a traditional lawsuit brought before the court system. While petitions are with AFCA, the provider in question will not be able to take any legal enforcement type action against the charity or other consumer.

Improves Access, Standards and Accountability

With its creation, the law now requires that all financial services firms become members of AFCA, which currently stands at 36,000 members and counting. In addition to acting as a mediator in financial disputes, AFCA will work within the financial services industry to improve its standards of conduct and accountability.

AFCA currently expects to receive around 1,000 complaint filings a week, but also plans to work with its members to find constructive ways to reduce, and ultimately avoid, the causative factors that lead to these disputes. These types of complaints not only threaten the reputation of financial services providers, but they can also have a profound, negative impact on the ability of charities and other consumers to be solvent and self-sustaining.

To learn more about membership requirements, AFCA rules and operational guidelines, and the process to lodge a complaint and seek a fast, free, legally binding resolution, please visit AFCA’s website.