One-stop Shop For Charities’ Financial Complaints
Friday, 19th October 2018 at 3:05 pm
Charities will soon be able to resolve major financial disputes for free through a new independent ombudsman.
The launch of the Australian Financial Complaints Authority (AFCA) on 1 November allows any registered charity to settle complaints with the financial services sector in a legally-binding manner.
The new one-stop shop for financial complaints replaces three current dispute resolution bodies and has significantly higher financial thresholds, meaning it could handle many more disputes than previous schemes.
AFCA CEO and chief ombudsman David Locke – the former assistant commissioner of the Australian Charities and Not-for-Profits Commission – told Pro Bono News charities would benefit enormously from the new body.
“For the very first time, ACNC-registered charities will have a place to go with any financial disputes they may have,” Locke said.
“And for many small not for profits, having a major insurance claim that isn’t settled or having an issue with your credit facilities can make the difference between whether the organisation is solvent or not.
“Bringing a complaint to us is entirely free, and if we make a determination you’re happy with, then that determination is binding upon the financial firm.”
Finding financial hardship matters difficult to handle? In 15 days, AFCA will be able to help. To learn more about AFCA's services, visit https://t.co/LiL25n5qYy #CountdownToAFCA pic.twitter.com/rme5VIpNLk
— Australian Financial Complaints Authority (@AFCA_org_au) October 17, 2018
The AFCA already has 36,000 members, and all financial firms, including superannuation funds, are required by law to be ACFA members.
When AFCA legislation passed Parliament in February, then financial services minister Kelly O’Dwyer said the body would ensure consumers got a fair deal in resolving disputes with banks, insurers and super funds, without having to go to court.
Locke said AFCA was also important for charities that worked with people in financial distress, and offered access to justice for many people who had no other avenue to help.
“Many charities work with people who have debts and financial difficulties and they can now raise those issues with us,” he said.
“We have dedicated teams working on financial hardship cases and whilst the matter is with us, the financial services provider can’t take any enforcement action.
“So we will do a lot of work helping some of the poorest and most deprived people with financial disputes to get a fair resolution.”
While the AFCA expects to receive around 1,000 new complaints a week, Locke said the body wants to work with members to prevent disputes arising in the first place.
And at a time when the financial sector is under increased public scrutiny due to the banking royal commission, Locke said ACFA aimed to improve standards within the sector.
“There’s clear lessons from the royal commission for the financial services industry but also for ombudsman schemes as well,” he said.
“So we hope to be at the cutting edge of helping to restore public trust and confidence in the financial services industry.”