The Australian Financial Complaints Authority (AFCA) is an independent and external complaint resolution scheme that considers complaints from consumers against entities operating in the credit, financial services, superannuation, and insurance industries.

This paper examines the role of AFCA, the complaints process, and the powers and remedies available to AFCA with a focus on consumer complaints against lenders. In this piece, we provide an overview of AFCA generally as well as a detailed analysis of who can make a complaint and who a complaint can be made against.

Overview of AFCA

The AFCA scheme was introduced by the Treasury Laws Amendment (Putting Consumers First - Establishment of the Australian Financial Complaints Authority) Act 2018.

AFCA was authorised by the Minister for Revenue and Financial Services in 2018 and is a consolidation of a number of previous external dispute resolution schemes including the financial ombudsman service, the credit and investments ombudsman, and the superannuation complaints tribunal.

In the Explanatory Memorandum to the Treasury Laws Amendment Bill, it is explained that the purpose of establishing AFCA was to create a 'one stop shop' to resolve all financial complaints.

The AFCA scheme is governed by a set of rules which are approved by the Australian Securities and Investments Commission (ASIC). The most recent version being the AFCA: Complaint Resolution Scheme Rules published on 13 January 2021 (Rules). The Rules are explained in more detail by AFCA's Operational Guidelines. The most recent version of the guidelines is the AFCA: Operational Guidelines to the Rules published on 1 April 2022 (Guidelines).

As a 'one stop shop' AFCA determines complaints about:

• Credit, finance and loans.

• Insurance.

• Banking deposits and payments; investments and financial advice.

Who can make complaints and against whom?

Complaints can only be made by an Eligible Person against a Financial Firm that is an AFCA member.

An Eligible Person is set out in section E.1 of the Rules and includes, but is not limited to:

• An individual.

• A registered charity.

• A partnership, incorporated trustee, or not-for-profit organisation-however, if it carries on a business, then it must meet the small business requirement.

• The corporate trustee of a self managed superannuation fund or a family trust, carrying on a small business only.

• An incorporated small business with less than 100 employees.

The Rules include a number of types of eligible persons so that those persons eligible to make a complaint are clearly ascertainable by reviewing the Rules. AFCA is very quick to ensure that the person making a complaint is eligible to do so. Being a consumer dispute resolution service, AFCA seeks to ensure that they are only deciding on complaints that are eligible and not those which ought rather be determined by a court or tribunal.