Disputes with financial firms

The term ‘financial firm’ includes banks and other lenders, insurance companies, financial advisers, mortgage brokers, stockbrokers, managed investment schemes, and superannuation funds (but not self-managed superannuation funds (SMSFs)).

Financial firms that provide financial services to retail clients must have in place a process to resolve complaints with consumers and small business.

This information sheet explains:

• how to resolve your complaint directly with a financial firm, through their internal dispute resolution (IDR) process
• how to resolve your complaint through the Australian Financial Complaints Authority (AFCA), which is an external dispute resolution (EDR) scheme for financial complaints
• ASIC’s role in dealing with complaints about financial firms.

AFCA commenced on 1 November 2018 and replaced the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal (SCT).

How to resolve your dispute at IDR

First, you must make your complaint directly to the financial firm. This gives them an opportunity to resolve your complaint through their IDR process. Many complaints are resolved this way.

You can find out how to complain from the financial firm’s website, Financial Services Guide (FSG) or Product Disclosure Statement (PDS).

The financial firm must try to resolve your complaint in a timely way. They must tell you:

• their final decision about your complaint
• about your right to take your complaint to AFCA if you are still unhappy, and provide details about how to contact AFCA.

How to resolve your dispute through AFCA

If the financial firm has not resolved your complaint, you can take your complaint to AFCA.

AFCA is an independent EDR scheme that deals with consumer and small business complaints about financial firms. AFCA is an alternative to going to court, which can be expensive.

AFCA can be contacted by:

• phone on 1800 931 678, or
• lodging a complaint online at the AFCA website.

What AFCA can do

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.

These steps 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 (if you accept the decision). If you do not accept the decision, you keep your legal rights to take your complaint to court.

What to do if you are unhappy with AFCA’s decision or handling of your dispute

If you wish to make a complaint about how AFCA dealt with your complaint, you can raise the issue directly with AFCA and the scheme’s independent assessor. For more information, see Information Sheet 176 What to do if you are dissatisfied with a decision by the Australian Financial Complaints Authority (INFO 176).

If you are unhappy about an AFCA decision about your complaint, it may be that taking your complaint to court is the only avenue available to you.

You may need legal advice to help you make this decision. If you are unsure of how to access legal advice, contact the Law Society in your state or territory.

ASIC’s role in relation to disputes with financial firms

ASIC has no role in resolving individual complaints or in AFCA’s decision making. This means that we cannot:

• review decisions by AFCA, 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.

Where can I get more information?

• See our website for more information about ASIC’s role and the laws we administer.
• See ASIC’s Moneysmart website for more information about how to complain, including sample letters for lodging a complaint with a financial firm.
• For information about the standards and requirements that apply to firms’ IDR procedures, see Regulatory Guide 271 Internal dispute resolution (RG 271).
• For more information about what to do if you are unhappy with a decision by AFCA, see INFO 176.
• For information about our oversight of AFCA, see RG 267.

Important notice

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. We encourage you to seek your own professional advice to find out how the applicable laws apply to you, as it is your responsibility to determine your obligations.

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.