Finance brokers back new financial complaints authority

The new Australian Financial Complaints Authority (AFCA) being planned by the federal government will be good for consumers, according to the peak body representing Australia’s finance brokers, the Finance Brokers Association of Australia (FBAA).

The formation of AFCA has been criticised in the media by some smaller financial services firms and the Credit & Insurance Ombudsman (CIO), who claim it will favour the big banks and therefore won’t be trusted.

However, FBAA executive director Peter White said the new body will be focused on even better outcomes for small businesses and consumer borrowers, as has always been the case, not associations.

“The amalgamation of the Financial Ombudsman Service (FOS), the CIO and the Superannuation Complaints Tribunal (SCT) will improve systems that will lead to better consumer outcomes.

“We believe it will speed up turnaround times and streamline case management processes without the non-alignment of processes by two separate ombudsmen.

“The CIO needs to remember the ombudsman service is about borrower disputes being resolved and not industry bodies. There is no basis or substance to call for a royal commission into this.”

Mr White has also described as baseless, the criticisms by smaller firms that they will end up subsidising a scheme which accommodates the major banks.

“There is no evidence at all to support those claims.”

He said the FBAA fully supports the government’s initiative to create AFCA.