31 October 2018
The newly created Australian Financial Complaints Authority, to begin operation on November 1, is an important step to streamlining dispute resolution, making it easier to access and easier to understand for customers.
CEO of the Australian Banking Association Anna Bligh said banks are strong supporters of external dispute resolution and supported streamlining the process to better help customers understand where they need to go if they have a complaint.
“A fast, free and binding service which deals with disputes outside of court is the best way for a customer’s issue to be heard and quickly resolved,” Ms Bligh said,
“Banks first set up an external dispute resolution scheme for their customers in 1989 with the Australian Banking Industry Ombudsman Scheme to ensure a fair and transparent outcome for both parties.
“The creation of AFCA as a one stop shop is an important next step for the industry as it provides customers an easy to access and easy to understand avenue for having disputes resolved quickly and fairly.
“Merging external dispute resolution schemes from insurance, banking and superannuation into one organisation will ensure there is a consistency for the customer in decision making on their issues.
“AFCA will have increased powers including expanded scope to hear disputes from larger businesses and the ability to award compensation for direct and indirect financial loss and non-financial loss.
“The Banking Code of Practice will be used by AFCA as the new benchmark for industry practice, considering in its investigations if a bank has breached the Code and therefore its contract with the customer,” she said.
All ABA banks are members of the scheme therefore financially contribute to AFCA, which will ultimately be fully funded by contributions from the broader financial services industry.
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“This is about engaging with the entire banking ecosystem in order to ensure the accessibility of the sector’s services are best serving our diverse community now, and into the future.”
“What is underpinning this bank failure is a number of things, but not least of all, it’s a very niche bank with high exposure to one part of the economy. And that’s the part of the economy that’s been quite volatile and troubled”
The Treasurer has indicated that the federal government is closely monitoring the situation.