What to do if you are dissatisfied with a decision by the Australian Financial Complaints Authority
This information sheet (INFO 176) explains what you should do if you are dissatisfied with a decision made by the Australian Financial Complaints Authority (AFCA). It explains:
- how AFCA will deal with your complaint
- what you should do if you are unhappy with the decision
- ASIC's role in relation to AFCA decisions
- where you can get more information.
AFCA is an independent external dispute resolution (EDR) scheme that deals with consumer and small business disputes about financial firms. AFCA is an alternative to going to court, which can be expensive.
AFCA commenced on 1 November 2018 and replaced the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and Superannuation Complaints Tribunal (SCT).
AFCA must deal with complaints independently and fairly.
Before considering a complaint, AFCA must confirm that your complaint is one it can deal with under AFCA’s Complaint Resolution Scheme Rules (AFCA Rules).
Once it begins to consider your complaint, AFCA will decide on the best approach to resolving it. This may include:
- asking for further information from you or the financial firm
- helping you to resolve your complaint with the financial firm (often through negotiation or conciliation).
After considering the issues, AFCA may decide that the financial firm:
- has dealt with your complaint appropriately and does not need to award any compensation or take any further steps, or
- needs to take certain steps to resolve the complaint.
'Resolving the complaint' may include:
- correcting an error made in an interest rate calculation
- refunding a fee
- paying an insurance claim in part or in full
- paying money to make good on investment or other losses, or
- cancelling a loan or working out a payment plan for debts you owe.
For most complaints, AFCA's decisions are binding on the financial firm, but you do not have to accept it. If you do not accept the decision, you keep your legal rights to take your complaint to court.
Consider the reasons for the decision and contact AFCA to discuss
AFCA must make their decisions fairly, taking into account the law and good industry practice. Ask AFCA to explain the decision. If you think an error has been made, let AFCA know. An example of this may be where there seems to be a calculation error or where a vital piece of information may have been overlooked.
AFCA must have an independent assessor. This is a person, appointed by the AFCA board, whose role is part of AFCA's quality assurance and accountability framework.
The primary role of the independent assessor is to:
- respond to complaints received about AFCA's complaints handling service (service complaints)
- identify, address and report on issues affecting AFCA’s complaints handling operations and performance
- as appropriate, make recommendations about identified issues.
AFCA will also report to ASIC once every quarter about all service complaints.
If you wish to make a complaint about how AFCA dealt with your complaint (but not the outcome of your complaint), you can raise the issue directly with AFCA and the scheme's independent assessor.
Consider your legal options
If AFCA decides in favour of your financial firm and you are still unhappy, you are not bound by the decision. You keep your legal rights to take your complaint to court.
Please note: It may not always be worth your while to start court action over a small complaint. On the other hand, court action may be the only avenue available for you to be compensated for your loss, particularly if you have suffered a large loss.
A lawyer can tell you if you have a good case to take to court. If you are unsure of how to access legal advice, contact the Law Society in your state or territory.
ASIC has no role in resolving individual complaints or in AFCA's decision making.
This means that we cannot:
- review decisions by an EDR scheme, including AFCA, FOS, CIO or the SCT (only a court can reconsider a matter that has been before an EDR scheme), or
- give legal advice or generally act on behalf of individual consumers.
Regulatory Guide 267 Oversight of the Australian Financial Complaints Authority (RG 267) sets out how ASIC performs our oversight role in relation to AFCA. However, these powers do not include intervening in the decision-making process of the scheme.
- See our website for more information about ASIC’s role and the laws we manage.
- For more information about taking complaints through internal dispute resolution and to AFCA, see Information Sheet 174 Disputes with financial firms (INFO 174).
- See ASIC's MoneySmart website for more information about EDR schemes, including sample letters for lodging a complaint with a financial firm.
- For information about our oversight of AFCA, see RG 267.
- For information about our oversight of the predecessor EDR schemes (FOS and CIO) see Regulatory Guide 139 Approval of external dispute resolution schemes (RG 139).
Please note that this information sheet is a summary giving you basic information about a particular topic. It does not cover the whole of the relevant law regarding that topic, and it is not a substitute for professional advice.
You should also note that because this information sheet avoids legal language wherever possible, it might include some generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances must be taken into account when determining how the law applies to you.
This is Information Sheet 176 (INFO 176), reissued in November 2018. Information sheets provide concise guidance on a specific process or compliance issue or an overview of detailed guidance.