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Update: Australian Financial Complaints Authority (AFCA)
Ryan Neary (Manager, Professional Risks at GSA) recently attended the first Professional Indemnity consultation group for the Australian Financial Complaints Authority (AFCA). AFCA is the new ombudsman for the financial services industry (previously FOS, COSL and SCT).
AFCA has now been established for four months. The statistics below show a significant increase in complaints:
- In four months, there have been 23,681 complaints received
- There has been a 42% increase in the actual volume of claims
- In four months 49% of the AFCA complaints have been closed
- There has been $54.3million paid in compensation
One of the major changes is that AFCA can now rule of awards of up to $500,000. Unresolved disputes under previous compensation schemes can now be re-submitted and looked at by AFCA. Consumers with an unresolved complaint for financial advice provided post 1 January 2008 have one year to bring the action to AFCA. If there has been a court decision, a decision by FOS, COSL or SCT or a settlement deed, these matters can’t be re-submitted to AFCA for review.
The increase in complaints is expected to further increase premiums. We are helping clients manage their renewal by approaching new markets and starting the renewal process early. GSA are proactive in ensuring compliant and “good performing” financial planners are not being tarred by the same brush.
GSA will be closely monitoring the situation. If you have any questions, please speak to Ryan Neary.