AFCA Scheme (Additional Condition) Amendment Authorisation 2019

Overview

The AFCA Scheme (Additional Condition) Amendment Authorisation 2019 was introduced to address a gap in the Australian Financial Complaints Authority (AFCA) scheme by setting an additional condition for the authorisation of the scheme. Enacted under subsections 1050(4) and (5) of the Corporations Act 2001, the authorisation was made by the Treasurer, Josh Frydenberg, who was satisfied that the mandatory requirements under the Act would be met. This notifiable instrument aims to allow eligible persons to make complaints under the AFCA scheme for compulsory members, with specific exclusions and timeframes. The authorisation took effect on 30 June 2019, introducing an additional condition for the AFCA scheme that permits eligible individuals to file complaints related to compulsory members during a specified period, from 1 July 2019 to 30 June 2020, provided the complaints are not otherwise excluded under the scheme rules.

Scope and Application

The AFCA Scheme (Additional Condition) Amendment Authorisation 2019 applies to the Australian Financial Complaints Authority (AFCA) scheme, which is a mandatory external dispute resolution scheme for financial services and credit providers. The Act allows for eligible persons to make complaints about compulsory members of the AFCA scheme, defined as those required to be members under a law of the Commonwealth. The authorisation applies to complaints made during the period from 1 July 2019 to 30 June 2020, provided they do not fall under the exclusions such as complaints about conduct that occurred before 1 January 2008, those where a decision has already been made by a court or tribunal, or those that solely relate to rights or obligations under the Privacy Act 1988. The authorisation also amends the AFCA scheme rules to ensure that complaints are handled in accordance with these rules as in force from the date of the instrument's commencement. The jurisdictional reach of this legislation is national, applying across Australia as it pertains to a scheme established under the Corporations Act 2001. The authorisation is subject to the mandatory requirements of the Corporations Act and does not introduce any new exclusions beyond those already defined in the scheme rules.

Key Provisions

The AFCA Scheme (Additional Condition) Amendment Authorisation 2019 introduces a new condition to the Australian Financial Complaints Authority (AFCA) scheme. Under section 9 of Schedule 1, this additional condition requires the AFCA scheme to allow an eligible person to make a complaint if certain criteria are met. Specifically, the complaint must pertain to a compulsory member of the AFCA scheme who is a member at the time the complaint is made (section 9(1)(a)), and it must not be an excluded complaint as defined in section 9(4) of Schedule 1. This includes complaints about conduct that occurred before 1 January 2008, complaints already decided by a court or tribunal, complaints already determined under a predecessor scheme or the AFCA scheme, complaints about superannuation death benefits, and complaints solely about rights or obligations under the Privacy Act 1988 (section 9(4)(a)-(e)). Complaints that have been finally settled between the parties are also excluded if they can no longer be made under the scheme rules (section 9(4)(f)). Additionally, complaints must not be barred by the scheme rules except for time limits (section 9(1)(c)). The period for making such complaints is from 1 July 2019 to 30 June 2020, but this does not affect complaints that can otherwise be considered by the AFCA scheme (section 9(2)). Complaints made within the specified period must be determined according to the scheme rules in force on the commencement date of this instrument (section 9(3)). The AFCA Scheme (Additional Condition) Amendment Authorisation 2019 imposes several obligations on the AFCA scheme. Firstly, it mandates that the scheme permit eligible persons to make complaints that meet the criteria outlined in section 9 of Schedule 1. This includes ensuring that complaints are not barred by the scheme rules except for time limits. Secondly, the scheme must determine these complaints in accordance with the scheme rules as they were in force on the commencement date of this instrument, which is 30 June 2019. The authorisation also necessitates that the scheme defines terms such as "compulsory member," "eligible person," and "excluded complaint" in a manner consistent with the definitions provided in section 9(4) of Schedule 1. Furthermore, the authorisation requires the scheme to operate within the specified timeframe for accepting complaints, from 1 July 2019 to 30 June 2020. The AFCA Scheme (Additional Condition) Amendment Authorisation 2019 does not explicitly outline specific offences, penalties, or consequences for breach within the text. However, the authorisation is made under the Corporations Act 2001, and breaches of the conditions specified within this instrument could potentially result in civil or criminal penalties as prescribed under the Corporations Act. For instance, section 1317E of the Corporations Act stipulates that a person who contravenes a civil penalty provision can be fined up to $210,000 for a corporation and $42,000 for an individual, depending on the severity and nature of the breach. Additionally, under section 1317G, a person who contravenes a criminal penalty provision can be fined up to $210,000 for a corporation and $42,000 for an individual, or imprisonment for up to five years, or both. These potential penalties underscore the importance of compliance with the conditions set forth in the authorisation.