Competition and Consumer (External Dispute Resolution Scheme–Banking Sector) Instrument 2019

Overview

The Competition and Consumer (External Dispute Resolution Scheme–Banking Sector) Instrument 2019 was enacted to formally recognise the Australian Financial Complaints Authority (AFCA) as the external dispute resolution scheme for resolving disputes within the banking sector that relate to the Consumer Data Right (CDR) and Part IVD of the Competition and Consumer Act 2010. This notifiable instrument was made by the Australian Competition and Consumer Commission and it aims to provide a streamlined process for consumers to have their disputes resolved efficiently and effectively. The policy objective behind this instrument is to ensure that consumers in the banking sector have access to a dedicated and recognised entity for the resolution of disputes, thereby enhancing consumer protection and confidence within the sector.

Scope and Application

The Competition and Consumer (External Dispute Resolution Scheme–Banking Sector) Instrument 2019 is a notifiable instrument made by the Australian Competition and Consumer Commission under section 56DA(1) of the Competition and Consumer Act 2010. This instrument recognises the Australian Financial Complaints Authority as the external dispute resolution scheme for resolving disputes concerning the operation of the consumer data rules, or Part IVD of the Act, within the banking sector. These disputes may involve CDR participants for CDR data, CDR consumers for CDR data, or other persons relating to the banking sector. The instrument applies to entities and individuals within the banking sector as designated by the Consumer Data Right (Authorised Deposit-Taking Institutions) Designation 2019. The instrument came into effect on the day after its registration on the Federal Register of Legislation. The scope of this legislation is specifically tailored to the banking sector and does not extend to other industries, ensuring that disputes within the defined scope are appropriately managed through the recognised external dispute resolution scheme.

Key Provisions

The Competition and Consumer (External Dispute Resolution Scheme–Banking Sector) Instrument 2019 (section 1) establishes the recognition of the Australian Financial Complaints Authority (AFCA) as the external dispute resolution scheme for resolving disputes within the banking sector. This recognition is specifically in relation to the operation of the consumer data rules or Part IVD of the Competition and Consumer Act 2010 (section 5). The instrument came into effect on the day after its registration on the Federal Register of Legislation (section 2). This legislative instrument was made under section 56DA(1) of the Competition and Consumer Act 2010 (section 3). The recognition of AFCA as the external dispute resolution scheme (section 5) imposes several obligations on the Australian Competition and Consumer Commission (ACCC). Primarily, the ACCC must ensure that AFCA is appropriately equipped to handle disputes related to consumer data rules and Part IVD of the Act within the banking sector. This includes ensuring that AFCA has the necessary resources, expertise, and processes in place to effectively resolve disputes involving CDR participants, CDR consumers, and other persons relating to the banking sector. The Act also imposes specific requirements on AFCA. It must establish and maintain a system for the resolution of disputes that is fair, efficient, and accessible to all parties involved. This includes ensuring that dispute resolution processes are transparent, that decisions are made in a timely manner, and that all parties are treated equitably. Additionally, AFCA must keep records of all disputes resolved and report to the ACCC on a regular basis to ensure compliance with the statutory requirements. In terms of consequences for breaches, the Competition and Consumer Act 2010 provides for both civil and criminal penalties. For civil penalties, the maximum penalty for contravening a provision of the Act can be up to $1.1 million for corporations and $220,000 for individuals, depending on the nature and severity of the breach. Criminal penalties may also apply, with individuals potentially facing imprisonment for up to five years for serious offences such as fraudulent conduct or market manipulation. For AFCA, failure to comply with its obligations under this instrument could result in sanctions or penalties imposed by the ACCC, potentially impacting its operations and credibility in dispute resolution.