News / Advocacy

AFCA review

The MFAA welcomes Treasury’s release of the Final Report on the Review of the Australian Financial Complaints Authority (AFCA).

Earlier this year, Treasury conducted a Review into AFCA’s operations and to consider changes to be made to ensure the scheme is appropriately calibrated and operating effectively within the existing framework. The MFAA made a submission to that Review.

The Review found AFCA was performing well in a difficult operating environment and a changing regulatory landscape but that ‘AFCA will need to continue to develop and improve its processes as it consolidates its place in the financial system’.

The Review makes 14 recommendations in total, with most of the recommendations focusing on enhancements to AFCA’s transparency towards parties to a complaint, and improvements to its decision-making processes.


The MFAA put forward a number of the key recommendations in relation to AFCA fees, particularly highlighting MFAA’s members views about the fairness of AFCA’s current fee structure. The Review recognised AFCA’s internal review of its fee structure, and made the following recommendations for AFCA to consider as part of that internal review :

  • AFCA’s funding model should not disincentivise financial firms from defending complaints that they consider do not have merit and should better take into account the circumstances of small financial firms.
  • AFCA should improve the transparency of its fees for financial firms and how the fees are being used to support AFCA’s activities.

Appeals process:

The MFAA recommended the implementation of an appeals process in relation to AFCA determinations. While this recommendation was not adopted, the Review recommended:

  • The substance of a determination should be reviewable with respect to its application to future cases. To this end, it’s been recommended AFCA enhance the visibility, accessibility and independence of its existing forward-looking review mechanism.
  • AFCA should amend its Operational Guidelines to remove the requirement for an applicant to demonstrate an error of law to access the formal forward-looking review mechanism. Applicants should be able to access it if they are able to demonstrate that the AFCA determination adopts an approach that could have a significant impact across a class of consumers, businesses or transactions.
  • Complaints about AFCA’s service should remain the responsibility of the Independent Assessor. AFCA should improve the Independent Assessor’s visibility as part of its communications with parties to a complaint.

Authorised Credit Representatives:

Another notable recommendation for MFAA members is that the National Consumer Credit Protection Act 2009 should be amended to no longer require authorised credit representatives to be members of AFCA. Legislation will be required to implement this recommendation. The MFAA looks forward to participating in consultations in relation to this impending regulatory change.

Access the final report of the Review

Read our submission

Watch MFAA CEO Mike Felton provide an update on the outcome of the review.

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