How the new financial complaints scheme could change the game for your dispute

Adam Smith 23 November 2018

The new dispute resolution scheme means consumers and small businesses could receive higher levels of compensation.

From 1 November 2018, the Australian Financial Complaints Authority (AFCA) took over duties as the dispute resolution scheme for the financial services industry. The AFCA replaces the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal (SCT).

The change means that consumers and small businesses will have one authority to help resolve complaints with financial services providers rather than three different schemes for different finance products. It also means that the amount of compensation on offer could be significantly higher.

In addition to offering higher levels of compensation, AFCA has also raised the monetary limits on the financial products and facilities it will deal with. For consumers and small businesses, this means the ability to recover more money in a dispute and to dispute larger amounts.

You can compare the new AFCA limits to the previous FOS limits in the table below.

Type of claim Current FOS limits New AFCA limits
Most non-superannuation disputes Monetary limit
$500,000
Monetary limit
$1 million
Compensation cap
$323,500
Compensation cap
$500,000
Dispute about a small business credit facility Facility limit
$2 million
Facility limit
$5 million
Compensation cap
$323,500
Compensation cap
$1 million
Dispute about a small business credit facility to primary production business (eg agriculture, forestry and fishery businesses) Facility limit
$2 million
Facility limit
$5 million
Compensation cap
$323,500
Compensation cap
$2 million
Dispute about whether a guarantee should be set aside where it has been supported by a mortgage or other security over the guarantor’s primary place of residence Monetary limit
$500,000
No monetary limit
Facility limit for small business
$2 million
Facility limit for small business
$5 million
Compensation cap
$323,500
No compensation cap
Income stream product disputes Compensation cap
$8,700 per month
Compensation cap
$13,400 per month
Uninsured third party motor vehicle claims Compensation cap
$5,000
Compensation cap
$15,000
General insurance broker disputes Compensation cap
$174,000
Compensation cap
$250,000

Source: FOS

If you already had a dispute lodged with FOS, the SCT or the CIO prior to 1 November, it will be handled under those schemes' previous terms of service.

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