AFCA
Merit assessment adopted
On 9 May 2022, AFCA announced that they have made the ‘merit assessment’ a permanent feature of its process, after its pilot program showed that the feature made complaints handling faster, cheaper and fairer for all parties.
This type of assessment at the initial stages of AFCA’s case management means that unmeritorious complaints (i.e. no clear errors or financial loss) can be identified early. If the complaint is found to be without merit, AFCA has discretion to exclude the complaint under its rules (specifically Rule A.8.3).
AFCA tested the process in a three-month pilot program which found that the time taken to resolve selected cases was half when compared with comparable cases, and the fees charged was as much as 75 per cent lower.
The merit assessment is part of AFCA’s response to Recommendation 4 and 7 of the Independent Review of AFCA as it:
- addresses poor conduct by some paid advocates; and
- ensures the funding model does not deter firms from defending complaints.
New funding model finalised
On 31 May 2022, AFCA finalised their new funding model after the model was approved by their independent board.
AFCA stated that the new model includes a single registration fee and a simplified complaints fee structure, where all AFCA members will qualify for five free complaints per year. Additionally, the superannuation levy has also been abolished and superannuation funds have been brought under the same fee structure as other scheme members, which has a positive or neutral impact to most super trustees.
As a result of the new scheme, AFCA noted that overall, 95% of licensed financial firm members of the AFCA external dispute resolution scheme will only pay the annual registration fee of $375.55 for the upcoming financial year, and 99.9% of authorised credit representatives will only pay $65.98 annually.