AFCA Scheme Amendment (2025 Measures No.1) Authorisation 2025
I, Stephen Jones, Assistant Treasurer and Minister for Financial Services, being satisfied the mandatory requirements under section 1051 of the Corporations Act 2001 have been met, make the following authorisation.
Dated 6 March 2025
Stephen Jones
Assistant Treasurer
Minister for Financial Services
Contents
1 Name
2 Commencement
3 Authority
4 Schedules
Schedule 1—Amendments
AFCA Scheme Authorisation 2018
1 Name
This instrument is the AFCA Scheme Amendment (2025 Measures No.1) Authorisation 2025.
2 Commencement
(1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
Commencement information |
Column 1 | Column 2 | Column 3 |
Provisions | Commencement | Date/Details |
1. Sections 1 to 4 and anything in this instrument not elsewhere covered by this table | The day after this instrument is registered. | |
2. Schedule 1 | The day after the end of the period of 12 months beginning on the day this instrument is registered. | |
Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.
(2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.
3 Authority
This instrument is made under the Corporations Act 2001.
4 Schedules
Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.
Schedule 1—Amendments
AFCA Scheme Authorisation 2018
1 Section 4
After the heading, insert:
Note: Expressions have the same meaning in this instrument as in the Corporations Act 2001 as in force from time to time—see paragraph 13(1)(b) of the Legislation Act 2003.
2 Section 4
Insert:
credit facility has the meaning given by the Corporations Regulations 2001 for the purposes of subparagraph 765A(1)(h)(i) of the Act.
3 After section 9A
Insert:
9B Condition on authorisation—complaints about banks relating to scams
It is a condition relating to the authorisation of the AFCA scheme that the AFCA scheme must permit a complaint to be made, in accordance with any requirements to be set out in the AFCA scheme rules, in relation to a bank carrying on a financial services business or engaging in credit activities, if:
(a) the complaint relates to either:
(i) an account opened, or credit facility made available, by the bank in the name of the complainant without the complainant’s consent, authorisation or authority; or
(ii) a receipt, internal movement, or external transfer, of funds by the bank, where the funds relate to the complainant; and
(b) the bank is a member of the AFCA scheme at the time the complaint is made; and
(c) the complaint relates to an attempt by someone to deceive the bank or the complainant (whether or not successful).
Overview
The AFCA Scheme Amendment (2025 Measures No.1) Authorisation 2025I was enacted to address the need for enhanced consumer protection in relation to scams and unauthorised activities by banks, particularly concerning the opening of accounts and the handling of funds without consent. This authorisation was issued by Stephen Jones, the Assistant Treasurer and Minister for Financial Services, under the authority granted by the Corporations Act 2001. The policy objective is to ensure that the Australian Financial Complaints Authority (AFCA) can handle complaints about banks in cases where the bank has opened accounts or credit facilities, or handled funds without the consent of the complainant, or where there has been an attempt to deceive the bank or the complainant. This measure aims to provide a more robust framework for consumers to seek redress against banks involved in such activities.
Scope and Application
The AFCA Scheme Amendment (2025 Measures No.1) Authorisation 2025 applies to the Australian Financial Complaints Authority (AFCA) and its authorised scheme. This authorisation modifies the AFCA Scheme Authorisation 2018, introducing new conditions that expand the scope of complaints that can be made under the AFCA scheme. Specifically, the authorisation requires that AFCA must permit complaints against banks relating to scams, provided the bank is a member of the AFCA scheme at the time the complaint is made, and the complaint concerns either an account or credit facility opened without the complainant’s consent, authorisation, or authority, or a receipt, internal movement, or external transfer of funds related to the complainant. This legislation applies to entities involved in financial services or credit activities and is subject to the conditions specified in the AFCA scheme rules. The authorisation is made under the Corporations Act 2001, and its provisions are effective as per the commencement dates specified in the instrument, with certain amendments to take effect after a period of 12 months from the date of registration. The authorisation does not specify any exclusions, exemptions, or thresholds, but it extends its application through the subordinate instruments detailed in the Schedules.
Key Provisions
The AFCA Scheme Amendment (2025 Measures No.1) Authorisation 2025I primarily amends the AFCA Scheme Authorisation 2018. Key provisions include the insertion of definitions and conditions regarding complaints. For example, Section 4 includes a note that expressions used in the instrument have the same meaning as those in the Corporations Act 2001, as in force from time to time (Section 13(1)(b) of the Legislation Act 2003). The instrument also defines the term "credit facility" according to the Corporations Regulations 2001 (Section 4). Furthermore, a new section 9B is introduced, stipulating that the AFCA scheme must permit complaints against banks relating to scams under certain conditions (Schedule 1).
The Act imposes specific obligations on the AFCA scheme, particularly regarding the handling of complaints. The scheme must allow complaints to be made against banks if certain criteria are met, such as when an account is opened or a credit facility is made available without the complainant's consent (Section 9B(a)(i)), or when there is a receipt, internal movement, or external transfer of funds related to the complainant (Section 9B(a)(ii)). Additionally, the bank must be a member of the AFCA scheme at the time the complaint is made, and the complaint must pertain to an attempt to deceive either the bank or the complainant (Section 9B(b) and (c)). These obligations are designed to ensure that consumers have a clear and accessible mechanism for addressing issues related to scams and unauthorised financial activities.
Breaches of the conditions set out in the AFCA Scheme Authorisation 2018 can result in significant consequences. Although the specific offences, penalties, or civil/criminal consequences for non-compliance are not explicitly detailed in the provided text, it is reasonable to infer that the penalties could be severe given the nature of the amendments. Typically, breaches of financial services regulations can lead to substantial fines, legal action, or even the revocation of the AFCA scheme's authorisation, which could severely impact its ability to operate. The precise penalties would depend on the specific breach and the regulatory framework governing financial services in Australia.