Is your business a member of the Australian Financial Complaints Authority (“AFCA”)? All Australian financial services licensees providing services to retail clients, Australian Credit Licensees, authorised credit representatives and superannuation trustees are required by ASIC to be a member of AFCA as part of their licensing conditions.
In the 6 months to 31 December 2020, ASIC cancelled or suspended eight (8) Australian Credit Licences for failing to become members of AFCA.
What is AFCA?
AFCA is an impartial and independent body that offers dispute resolution services to resolve complaints about financial products and services. They do not act for either party and their decisions are binding on the financial service provider, where the complainant accepts the decision.
The areas of complaints they consider are:
- credit, finance and loans;
- banking deposits and payments;
- investments and financial advice; and
All AFCA members are required to complete an Annual Assessment before 30 April 2021 to ensure they are invoiced correctly, if not AFCA will make the assessment on their behalf.
What is an AFCA Annual Assessment?
The annual membership levy paid by AFCA members is based on the size of the business relative to other AFCA members, with a minimum levy amount payable. AFCA members are required to complete the business assessment, which includes identifying their primary business activity and size of their business, in order to calculate the AFCA membership levy.
If you are not a member of AFCA, and you are a retail AFS licensee, credit licensee, authorised credit representative or superannuation trustee, you should sign up with AFCA immediately. You will also need to consider the appropriate breach reporting which should be conducted, given AFCA membership was required from 1 November 2018 onwards. Once your ACFA membership has been received, you will need to ensure you update the ASIC Professional Register by lodging the appropriate form to notify ASIC of your AFCA membership.
All AFCA members should login to AFCA’s secure services portal and complete their annual assessment as soon as possible. It is also worthwhile checking your entity and contact details are correct, and that you have nominated the appropriate people within your entity as the External Dispute Resolution contact to ensure correspondence relating to all complaints is received and dealt with promptly.
Notifying ASIC of changes to your AFCA membership
In addition to having a membership with AFCA, any changes made to your membership must be provided to ASIC in writing:
This includes circumstances where:
- you fail to renew your AFCA membership,
- you no longer require AFCA membership; or
- AFCA has terminated your membership of the scheme.
- ASIC cancels eight Australian credit licences
- ASIC ensures licensees meet their AFCA membership obligations
- ASIC – dispute resolution
- AFCA Review in progress after initial covid delay
- AFCA changes regarding conduct of AFSL and ACL representatives
For more information on how to complete the Annual Assessment please visit AFCA.