EXPLANATORY STATEMENT

Issued by authority of the Assistant Treasurer and Minister for Financial Services

Competition and Consumer Act 2010

Competition and Consumer (Scams Prevention Framework – External Dispute Resolution) Authorisation 2026

Paragraph 58DB(1)(a) of the Competition and Consumer Act 2010 (the Act) provides that the Minister may, by legislative instrument, authorise an external dispute resolution (EDR) scheme for the purposes of Part IVF of the Act and one or more regulated sectors under that Part, if the scheme is already authorised under a Commonwealth law for another purpose.

Part IVF of the Act establishes the Scams Prevention Framework (SPF) for preventing and responding to scams that impact the Australian community, by requiring sectors of the Australian economy designated under the SPF to adhere to principle-based obligations (called SPF principles) and sector-specific codes (called SPF codes). Under the Competition and Consumer (Scams Prevention Framework—Regulated Sectors) Designation 2026, the banking sector, telecommunications sector and digital platforms sector are each designated as a regulated sector for the purposes of the SPF.

The purpose of the Competition and Consumer (Scams Prevention Framework – External Dispute Resolution) Authorisation 2026 (the Authorisation) is to authorise the Australian Financial Complaints Authority (AFCA) scheme to be the SPF EDR scheme for the banking, digital platforms and telecommunications sectors. As a result, a regulated entity providing a regulated service in one of those sectors must become a member of the AFCA scheme, as well as provide reasonable assistance to, and cooperate with, the operator of the scheme. This is required by subsections 58BZG(1) and (2) of the Act, which are civil penalty provisions.

The AFCA Scheme Authorisation 2018 authorises the AFCA scheme as an EDR scheme under Part 7.10A of the Corporations Act 2001 (Corporations Act). The AFCA scheme is a member-funded EDR scheme operated by AFCA. The scheme is subject to mandatory requirements under section 1051 of the Corporations Act and is overseen by the Australian Securities and Investments Commission (ASIC) under Division 2 of Part 7.10A of that Act. Some of these requirements are that complainants are exempt from payment of any fee or charge, and that complaints are resolved in a way that is fair, efficient, timely and independent.

Authorising the AFCA scheme as an SPF EDR scheme for the three regulated sectors ensures SPF consumers in these sectors have access to a ‘single door’, free and fair complaints resolution mechanism to seek redress for their scams-related complaints that are not resolved by internal dispute resolution. This avoids the administrative burden for both complainants and regulated entities of having multiple SPF EDR schemes involved in complaints that relate to multiple regulated entities across different sectors.

In making the Authorisation, the Minister has considered the accessibility, independence, fairness, accountability, efficiency and effectiveness of the AFCA scheme, in accordance with subsection 58DB(2) of the Act.

Public consultation was undertaken on an exposure draft of the Authorisation from 28 November 2025 to 5 January 2026 along with a draft designation instrument. This process built on extensive consultation undertaken during the development of the SPF. 52 public submissions were received on the exposure draft package and submissions were generally in favour of AFCA being authorised as the SPF EDR scheme.

The Authorisation is a legislative instrument for the purposes of the Legislation Act 2003 and is subject to the sunsetting and disallowance regimes set out in that Act.

The Authorisation commences on 1 July 2026.              

Details of the Authorisation are set out in Attachment A.

A statement of Compatibility with Human Rights is at Attachment B.

ATTACHMENT A

Details of the Competition and Consumer (Scams Prevention Framework – External Dispute Resolution) Authorisation 2026

Part 1 – Preliminary

This Part sets out machinery matters, which include the name and commencement, legislative authority and definitions. 

Section 1 – Name

This section provides that the name of the instrument is the Competition and Consumer (Scams Prevention Framework – External Dispute Resolution) Authorisation 2026 (the Authorisation).

All legislative references are to the Authorisation unless noted otherwise.

Section 2 – Commencement

This section specifies that the authorisation commences on 1 July 2026. Of relevance, Part 10 of the Authorisation includes application provisions that are explained below.

Section 3 – Authority

This section provides that the authorisation is made under the Competition and Consumer Act 2010 (the Act).

Section 4 – Definitions

This section sets out definitions of terms used in this Authorisation as follows:

•                 AFCA scheme has the same meaning as in section 761A of the Corporations Act 2001 (Corporations Act). Under section 761A of that Act, the AFCA scheme is an external dispute resolution (EDR) scheme for which an authorisation under Part 7.10A of the Corporations Act is in force. The scheme is operated by the Australian Financial Complaints Authority (AFCA).

•                 banking sector means the covered banking services designated as a regulated sector of the Australian economy under the Competition and Consumer (Scams Prevention Framework—Regulated Sectors) Designation 2026 (the Designation). Broadly, covered banking services encompass banking and purchased payment facility services provided by authorised deposit-taking institutions (ADIs) in Australia.

•                 digital platforms sector means the covered digital platform services designated as a regulated sector of the Australian economy under the Designation. Broadly, covered digital platform services comprise social media services, instant messaging services, and the provision of paid advertising on internet search engines.

•                 telecommunications sector means the covered telecommunications services designated as a regulated sector of the Australian economy under the Designation. Broadly, covered telecommunications services encompass services provided by carriers and carriage service providers in connection with voice calls and messages, excluding those delivered wholly over the internet.

•                 the Act means the Competition and Consumer Act 2010.

Expressions in the Authorisation otherwise have the same meaning as in the Act as in force from time to time, in accordance with paragraph 13(1)(b) of the Legislation Act 2003.

Part 2 – Authorised external dispute resolution schemes

Section 5 – Authorisation of external dispute resolution scheme for banking, digital platforms and telecommunications sectors

This section authorises the AFCA scheme as the SPF EDR scheme for the purposes of the Scams Prevention Framework (SPF) in Part IVF of the Act for the banking sector, the telecommunications sector and the digital platforms sector, respectively, under subsection 58DB(1) of the Act.

Paragraph 58DB(1)(a) of the Act allows the Minister to authorise an EDR scheme if the scheme is already authorised under a Commonwealth law for another purpose. The AFCA scheme is already authorised for the purposes of Part 7.10A of the Corporations Act (see the AFCA Scheme Authorisation 2018).

This Authorisation, in conjunction with the Designation, operationalises the obligations in the Act related to an SPF EDR scheme for regulated entities in the banking, digital platforms and telecommunications sectors. In particular, a regulated entity that provides a regulated service in one of those sectors must be a member of the AFCA scheme under subsection 58BZG(1) of the Act from 1 September 2026.

The Authorisation commences on 1 July 2026, prior to the requirement for regulated entities to be a member of an authorised EDR scheme from 1 September 2026 and full commencement of the SPF on 31 March 2027 via the Designation.

In practice, regulated entities will be required to engage and become a member of an authorised EDR scheme between 1 July 2026 and by 1 September 2026.

ASIC’s functions and powers relating to the AFCA scheme will also apply for the purposes of the SPF and each of the banking, telecommunications and digital platforms sectors. For example, under section 1052A of the Corporations Act, ASIC may issue regulatory requirements to AFCA relating to compliance with the mandatory requirements for the AFCA scheme for the purposes of the SPF and each of those regulated sectors. 

Part 10 – Application and transitional provisions

Section 50 – Application of authorisation

This section provides that, although the Authorisation generally applies from commencement, the operator of the AFCA scheme may only consider SPF complaints if the matter to which the complaint relates occurs on or after 31 March 2027 – that is, the date of full commencement of the SPF via the Designation. Earlier commencement of the Authorisation is intended to provide a transitional period to onboard regulated entities as members of the AFCA scheme by 1 September 2026, and accept complaints from 31 March 2027, as part of operationalising the SPF.

ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Competition and Consumer (Scams Prevention Framework – External Dispute Resolution) Authorisation 2026

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

Paragraph 58DB(1)(a) of the Competition and Consumer Act 2010 (the Act) provides that the Minister may, by legislative instrument, authorise an external dispute resolution (EDR) scheme for the purposes of Part IVF of the Act and one or more regulated sectors under that Part, if the scheme is already authorised under a Commonwealth law for another purpose.

The purpose of the Competition and Consumer (Scams Prevention Framework – External Dispute Resolution) Authorisation 2026 (the Authorisation) is to authorise the Australian Financial Complaints Authority scheme to be the SPF EDR scheme for the banking, digital platforms and telecommunications sectors. It supports the implementation of the framework by enabling regulated entities in those sectors to participate in an authorised EDR scheme for SPF related complaints.

Human rights implications

The Authorisation is administrative in nature and authorises the existing EDR scheme for the purposes of the SPF. It does not engage any of the applicable rights or freedoms.

Conclusion

This Authorisation is compatible with human rights as it does not raise any human rights issues as it impacts only regulated entities which will not be natural persons.