After commencing operations on 1 November 2018, the Australian Financial Complaints Authority (AFCA) advised ASIC that 58 financial services licensees and 217 credit licensees, who previously held external dispute membership with one of the previous schemes, had not obtained AFCA membership and may be in breach of their licence conduct obligations.
Following ASIC’s intervention with these potentially non-compliant financial and credit licensees:
- 50 financial services licensees subsequently obtained AFCA membership
- 4 financial services licensees voluntarily cancelled their licenses
- 4 financial services licensees were cancelled or suspended by ASIC
- 131 credit licensees subsequently obtained AFCA membership
- 38 credit licensees voluntarily cancelled their licenses, and
- 48 credit licensees were cancelled or suspended by ASIC.
‘ASIC has taken proactive measures to protect consumers from those few financial services licensees and credit licensees who were not complying with the obligations of their licence by being a member of AFCA. ASIC’s intervention means that consumers now have access to the independent dispute resolution scheme of AFCA if their complaints are not being properly considered by the financial services licensee or credit licensee,’ ASIC Commissioner Sean Hughes said.
ASIC will continue to work closely with AFCA to identify financial services licensees and credit licensees that are not complying with their obligations. Where entities fail to comply, ASIC will take formal action to cancel or suspend their licenses.
On 1 November 2018, AFCA was formed to provide external dispute resolution services for consumers that have unresolved complaints with entities providing financial and credit services.
AFCA replaced the Financial Ombudsman Service, Credit and Investments Ombudsman and Superannuation Complaints Tribunal (the previous schemes).
In Australia, as part of their general conduct obligations, all financial services licensees and credit licensees were required to obtain AFCA membership from 1 November 2018.