The Australian Financial Complaints Authority (AFCA) has today published a list of 231 financial firms it believes may need to be members of the new financial services dispute resolution scheme. Any entity required to be an AFCA member as a condition of their financial services or credit licence that has not yet joined AFCA is now in breach of their licensing obligation. AFCA has been liaising closely with the Australian Securities and Investments Commission (ASIC) about financial firms that have not taken out AFCA membership and ASIC will be taking appropriate action against these firms.
AFCA is asking organisations who were previously members of the Credit and Investments Ombudsman (CIO) and have not taken out AFCA membership, to check if they are on the published list. They then need to immediately take out or finalise their AFCA membership application if they are required to be a member, or contact ASIC to cancel their licence if they are no longer operating.
If a financial firm holding a current financial services or credit licence is still operating, and has not joined AFCA in accordance with their licence requirements, they are likely to be in breach of their legal obligations.
AFCA CEO and Chief Ombudsman, David Locke said, "We have been working with ASIC to contact and communicate with these firms about their requirement to take out AFCA membership since August. Despite several communications, these firms have not yet joined AFCA".
ASIC can take action to suspend or cancel the licence of an Australian Financial Service Licence (AFSL) or Australian Credit Licence (ACL) if they have not obtained AFCA membership.
"Please be aware that if you are not now a member of AFCA, and you are in fact obliged to be a member, you are likely to be in breach of your legal obligations", Mr Locke said.
"AFCA is the new one-stop-shop for external dispute resolution of financial complaints, and membership of AFCA is central to ensuring there is public trust in the financial services industry", said Mr Locke. "To protect this trust, it is critical that you ensure your organisation is an AFCA member if it needs to be, and that consumers and small businesses are able to make a complaint about your organisation".
AFCA is not able to deal with complaints from consumers and small businesses about a financial firm if the firm is not a current AFCA member.
Previous members of the Financial Ombudsman Scheme (FOS), Credit and Investments Ombudsman (CIO) and Superannuation Complaints Tribunal (SCT) were required to transfer their membership to AFCA by 21 September 2018. More than 36,000 organisations have completed the transfer to become members of AFCA.
All financial firm members of AFCA must also update their AFCA membership details with ASIC by 30 November 2018.