Consumers and businesses are the big winners with the passage of legislation to establish the Australian Financial Complaints Authority (AFCA), Country Liberals Senator Nigel Scullion, said.
Tens of thousands of consumers and small businesses in the Northern Territory will have access to free, fast and binding dispute resolution as a result of the establishment of AFCA.
The Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP, said “AFCA will provide a one-stop shop to ensure consumers get a fair deal in resolving disputes with their banks, insurers, super funds and small amount credit providers, without the expense, inconvenience, and trauma associated with going to court.”
The Coalition Government is also expanding access to the dispute resolution service by widening the range of disputes that AFCA will be able to hear, in line with recommendations from the AFCA Transition Team, chaired by Dr Malcolm Edey, former Assistant Governor of the Reserve Bank of Australia (RBA).
- the definition of a small business will be relaxed, so that any business with fewer than 100 staff can access AFCA;
- small business primary production producers – defined in accordance with the Income Tax Assessment Act 1997 – will be able to bring a dispute to AFCA and be able to access compensation of up to $2 million for credit facility disputes. The requirement that the dispute must relate to a credit facility of $5 million or less will remain;
- the cap on income stream product disputes will be increased from $8,300 to $13,400 per month;
- the cap on uninsured third party motor vehicle claims will increase from $5,000 to $15,000; and
- the separate compensation cap for general insurance broker disputes will be removed – instead these disputes will subject to the $500,000 compensation cap that will apply to most consumer disputes.
“I am pleased to say that small businesses and primary producers will overwhelmingly benefit from the new AFCA scheme, with significant increases in the compensation available and a more flexible definition of a small business,” Senator Scullion said.
“The Coalition Government has enhanced access to AFCA by redefining a small business as any business with fewer than 100 employees, and by lifting the compensation available to those small businesses that are primary producers to $2 million.”
AFCA will start receiving disputes from no later than 1 November 2018 and will replace the existing Financial Ombudsman Service, Credit and Investments Ombudsman and the Superannuation Complaints Tribunal.