ASIC media releases are point-in-time statements. Please note the date of issue and use the internal search function on the site to check for other media releases on the same or related matters.
19-224MR ASIC approves AFCA rule change enabling the naming of firms
ASIC has approved changes to the Australian Financial Complaints Authority (AFCA) Rules to allow the scheme to name financial firms in published determinations.
In its first six months, AFCA received 35,263 complaints. About 4,500 to 5,000 complaints are currently expected to be finalised each year by way of determination. While the publication of determinations has been a longstanding feature of the external dispute resolution schemes in Australia, the names of firms involved in financial services, superannuation and credit complaints have not been published to date.
AFCA applied for approval to change their Rules to enable identification of firms following public consultation. Consumers who are party to a complaint will continue to be anonymised in all determinations.
In approving this change ASIC took into account stakeholder feedback to AFCA’s public consultation and the statutory approval criteria.
ASIC’s view is that naming firms in determinations can help identify conduct or market problems within firms or affecting specific products or services, as well as highlighting where firms have done the right thing. It will also enhance transparency and accountability of firms’ performance in complaints handling and of AFCA’s own decision-making.
To support the new Rules, AFCA will shortly be issuing updated operational guidelines which set out examples of the circumstances in which a determination naming a financial firm would not be published. This includes where naming may expose confidential information about a firm’s systems or policies.
Naming firms in AFCA determinations is part of a broader set of reforms aimed at increasing transparency in financial services. This includes Parliament giving ASIC power to collect and to publish internal dispute resolution (IDR) data at firm level. The UK Financial Ombudsman Service has been naming firms in published determinations since 2013.
On 31 May 2019, AFCA conducted a public consultation on Rules changes to enable the scheme to name firms in determinations and received 25 submissions in response to that consultation.
ASIC approved this Rule change in accordance with legislative requirements in s1052D of the Corporations Act which require AFCA to seek ASIC approval of material changes to the AFCA scheme and establish the statutory approval criteria.
ASIC’s consultation on updates to internal dispute resolution (IDR) policy settings and data reporting framework (CP 311) closed on 9 August 2019. ASIC’s review of IDR policy and regulatory guidance is expected to be completed by the end of 2019.