Failure of the AFCA (Aust. Financial Complaints Authority) to act effectively on Consumers' complaints

Money
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26

Bleedingly obvious Australia is an easy target.
No prospects of even needing to play off for the wooden spoon as the world’s champion losers?

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What is it that sets Aussies apart from the rest of the world:

  • Is it our aging population not accustomed to the digital age?
  • Is it Australian banks, businesses and Govts pushing all into digital only?
  • Have our Govts and businesses acted in their own best interests without ensuring their customers needs are securely provided for?
  • How significant is the loss of personal data through poor business security in opening the doors for would be scammers to attempt to outwit customers?
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Anyone dealing with the AFCA should be aware that :

- AFCA is fully funded by the Finance Companies it supposedly regulates

- 75% of all AFCA claims are dismissed as without any substance

- The remaining 25% receive an average payout amount below $3,000

- AFCA state openly on their website that :

"We are not required to strictly apply legal principles. Where we consider that it is fair in all the circumstances to depart from legal principles, we will explain why”

"We will not, necessarily, be bound by the minimum standard that may be set in a particular industry code.”

AFCA’s SOLE PURPOSE IS TO MINIMISE PAYOUTS AND LITIGATION FOR FINANCE COMPANIES.

THE AFCA WORK FOR THE FINANCE COMPANIES, NOT FOR YOU.

DO NOT EXPECT THEM TO ACT IN YOUR INTERESTS.

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Hi @Marcus272727, welcome to the community.

While it is true that AFCA is funded by its members, the current funding model is broadly a cost recovery type model. While there are annual fees for its members, AFCA charges its members fees for complaints it receives, under a user charge model. It is explained on this AFCA webpage:

https://www.afca.org.au/members/funding-model

I expect this user charge model is to make those financial institutions which have more complaints, pay more than those who receive fewer complaints. Such model is also an incentive for financial institutions to resolve complaints before they are escalated to AFCA, or to carry out their operations to minimise the likelihood of complaint.

A user charge model also applies to many government services, especially with things like car registration, passports etc etc. Such models are used to pass costs onto those using the service, rather than across everyone irrespective of whether the service is used or not by an individual.

AFCA also is independent, non-profit organisation which operates under a fairness policy:

https://www.afca.org.au/about-afca/fairness

The Australian Financial Complaints Authority (AFCA) is required by legislation to operate in a way that is accessible, independent, fair, accountable, efficient and effective.

Fairness requires complaints to be considered objectively and without bias, and by staff and decision makers with appropriate expertise.

Our Rules also explicitly require that we provide procedural fairness to the parties to a complaint. This means that before we decide a complaint, both the person making the complaint and the financial firm must be provided with relevant information upon which we intend to rely and have an opportunity to provide their views and response.

Fairness is a subjective term and often difficult to qualify. AFCA has tried to outline how it achieves ‘fairness’ on the previously linked webpage.

Unfortunately since fairness is a subjective term, fairness can easily be thought of as not occurring when decisions made by AFCA are not in one’s favour. Likewise if one was expecting more from an AFCA decision.

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Are you also aware that there are other options for resolving a complaint? Consumers may choose to discuss with a solicitor and look to other legal avenues including court actions. Best discussed with a solicitor for advice on the likely time, costs and whether there is a reasonable basis for the claim.

For items of minor value one may find the AFCA offers a simpler, lower cost and more accessible solution. Although there are also instances where the pressing need may be to navigate a legally complex situation. It’s important to understand the options and seek legal advice when appropriate.

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