Home Regulators Australian Financial Complaints Authority (AFCA)

Australian Financial Complaints Authority (AFCA)

This page will teach you about the responsibilities and scope of AFCA (Australian Financial Complaints Authority). They are an Australian entity that serves to help with the protection of Australian financial markets. We share why they are essential and how they help money transfer customers. 

Updated: 29/09/2022
Read time: 7 minutes
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What Is the AFCA?

The AFCA is an external dispute resolution scheme aimed at helping resolve disputes that were not successful via member financial services organisations. The organisation was formed on the 1st of November 2018, and its headquarters are in Melbourne, Victoria, Australia. 

The Chief Ombudsman is David Locke, and the AFCA replaced three other schemes which existed at the time. These include Superannuation Complaints Tribunal, Credit and Investments Ombudsman, and the Financial Ombudsman Service. 

All banks and money transfer companies that want to participate in the Australian financial markets must have a membership with the AFCA. Also, the organisation is governed by a board of directors and has an equal number of consumer and industry representatives. This means the board has voices from the consumers using money transfer companies and the businesses that run them. 

What Is AFCA Responsible for?

Now let us turn our attention toward the responsibilities of the AFCA. This will provide insight into how the AFCA supports the money transfer industry. Therefore, you will have more confidence in using the Australian financial system. 

  • Receive complaints: the AFCA has a system in place for consumers and businesses to file complaints relating to credit, finance, loans, insurance, bank deposits and payments, investments and financial advice, and superannuation. The system allows for quick and smooth processing of claims. 
  • Mediate resolution: the AFCA helps businesses to seek out a resolution that is impartial and independent. They do not act on behalf of any parties or have biases. Their main objective is to seek a fair solution, and both parties leave content with the interaction. 
  • Development: they continue to develop their knowledge of how to provide the best resolutions to both parties in most scenarios. The AFCA also keeps up with various regulations to ensure they can figure out who is right or wrong. 

The AFCA is not a regulator, so they do not have powers handed down from the Australian Government. However, they have more of a supportive role in managing the Australian financial markets. Also, they are not a for-profit organisation. 

They are responsible for all aspects of the Australian financial markets. This means welcoming businesses from any financial industry and dealing with many complaints. Their responsibility is to process claims as fast as possible to achieve an adequate resolution. When both parties feel like they have been heard, this promotes trust in the Australian economy. 

Why Is the AFCA Important?

Now let us take a closer look at why the AFCA is a critical organisation. This will help you understand why the entity exists and if you should consider turning to them if you need to make a complaint of your own. 

  • Improves trust: the AFCA provides a platform for disgruntled users of the Australian economy to file a complaint and get a resolution. This allows them to continue using the Australian economy with trust, knowing that if something were to go wrong, they could turn to organisations like the AFCA for help. More confidence means the economy can flourish as investors are not hesitant to put their hard-earned money into the system. 
  • Protects money transfer customers: when sending money to Australia, you can turn to the AFCA if there is a problem. For example, if money is missing or held by the money transfer company without reason, then you can contact the AFCA. All money transfer companies must be members of the AFCA to participate in the Australian financial markets. 
  • Reduces fraud and malpractice: the complaints process holds companies accountable for their actions. If they fail to comply with regulations or act unfairly, then the AFCA is another method of accountability. In addition, when customers are unhappy with the service, companies might be inclined to fix the situation so they do not have to deal with the AFCA. 

A case study of the AFCA dealing with a complaint includes the case of Patersons Securities Limited v FOS in 2015. The Ombudsman ordered the FOS to pay $150,000 due to the verdict. This huge payout shows that matters before the AFCA can be severe.  

AFCA Regulations

This section will include various aspects of what the AFCA covers. Therefore, you can better understand the organisation’s scope and where its responsibilities end. 

Regulations: since the AFCA is not a regulator, they are not responsible for ensuring that specific regulations are upheld. However, they accept all types of cases within the entire spectrum of Australian financial market regulations. The nature of a complaint can mean that several regulations might be broken. Also, the AFCA looks closely at whether specific laws have been breached before reaching a verdict. 

Therefore, the AFCA needs to understand the specifics of all financial regulations to deal with cases effectively and reach a fair conclusion. 

Crimes: the AFCA does not deal with crimes since that is the role of regulators. Instead, they deal with complaints mainly about rule-breaking issues and disagreements about specific laws. For example, some financial rules have a lot of nuance and interpretation, so conflicts between businesses and consumers can arise. The AFCA ensures that these conflicts are resolved, and a fair version of the regulation in question is used. 

Industries: the industries that the AFCA covers include credit, loans, finance, insurance, banking deposits and payments, investments and financial advice and superannuation. They cover all aspects of these industries, so consumers and businesses can file complaints about any issue. 

Accountability: the AFCA is accountable to the Australian Government, the businesses and people using the Australian Financial markets. The board of directors has an equal amount of consumer and industry experts, so each side is fairly represented. 

What Regions Does the AFCA Cover?

The AFCA is responsible for receiving and dealing with complaints within Australia. This includes all geographical regions within the country. However, to ensure that they can resolve complaints adequately, they may need to collaborate with international partners. For example, complaints relating to international money transfers naturally require communication with entities overseas. 

When Might You Encounter the AFCA?

The AFCA might be encountered when you have a problem with a money transfer company. For example, if a company is holding your funds and you have no other course of action to get them released, then you can file a complaint with the AFCA. 

The AFCA deals with a wide range of complaints, which means they can help money transfer customers overcome challenges or when they are being taken advantage of. In addition, they are a good backup option in the event that the money transfer service is not providing the service they advertised. 

Can the AFCA Make New Rules?

The AFCA is not a regulator or has strong power granted by the Australian Government. Therefore, they do not have the authority to change the laws. Instead, they keep a close eye on how the laws are changed by Australian regulators and use them for guidance when seeking a resolution to disputes. 

How to Contact the AFCA?

This section provides you with the details required to contact the AFCA and file a complaint. There is a complaints process and a waiting time for each one to get read by a case officer. 

  • Phone: free call on 1800 931 678 and members can use 1300 56 55 62
  • File complaint: you can file a complaint by going to the AFCA’s homepage and clicking on the “Make a Complaint” button. 
  • Social media: you can interact with the AFCA on their social media properties, which include Facebook, Twitter, YouTube and Instagram. 
  • Email: you can write an email to info@afca.org.au

Bottom Line

To conclude, the AFCA is not a regulator or for-profit organisation. However, they are a vital cog in the Australian financial markets because they accept and resolve complaints across various financial industries. This ensures that money transfer customers are protected from wrongdoing. 

To continue learning more about how to transfer money to Australia, we encourage you to read our other guides.  You can start with Send Money To Australia and Send Money from the United States to Australia. These guides will help you figure out the best companies for saving money on fees, getting the best FX rates and reducing the transfer time compared with banks. 

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April Summers

April is a trained journalist and the Content Editor for MoneyTransfers.com. She has 10 years experience writing about a diverse range of subjects, from financial services to arts and entertainment. When she’s not writing about global remittances she can be found daydreaming about her next holiday abroad.