The 2021 Review of the Australian Financial Complaints Authority (AFCA) was undertaken by the Federal Government, it received 167 submissions. The review provided an opportunity for feedback on the operation of AFCA since its establishment in November 2018 and to consider whether further enhancements should be made to ensure the external dispute resolution (EDR) scheme is appropriately calibrated and operating effectively.
The Victorian Automotive Chamber of Commerce (VACC) supports AFCA’s formal obligation to identify systemic issues arising from complaints against AFCA’s members. AFCA plays an important role in the financial system, providing consumers and small businesses that have complaints about their financial firms, with access to an out-of-court dispute resolution service that is free, fast and binding.
VACC’s submission provided commentary into the effectiveness of AFCA’s processes for the identification and appropriate response to systemic issues arising from complaints in the general insurance motor vehicle industry and in relation to consumers who have been misled by intermediatory vehicle lease brokers, or credit financial institutions, in the lease agreement of a new motor vehicle from a franchise dealer.
VACC cautioned any changes to the consumer and small business dispute resolution framework jeopardises fluid consumer to business transactions and would naturally provide protections and guidance in the allocation of consumer finance. For the VACC, any removal of consumer or small business protections contradicts the essence of the Hayne Royal Commission findings.
As to continue AFCA’s statutory objective, requiring its processes be appropriate to identify systemic issues arising from complaints, VACC still recommends a more direct root cause analysis be completed by AFCA – focusing on direct AFCA members. If not, then the systemic issues afflicting consumers will continue, which is limiting to both the wider motor and insurer industries and consumers alike.