The corporate regulator has approved changes to the Australian Financial Complaints Authority (AFCA) Rules, which mandates the requirement for AFCA to give expanded access to the AFCA scheme for consumers and small businesses that were harmed by financial misconduct, dating back to 1 January 2008.
AFCA will be able to deal with certain complaints about conduct by current member financial firms, which AFCA, its predecessor schemes, courts or tribunals have not previously dealt with.
An eligible legacy complaint relates to a compulsory member of the AFCA scheme who is a member of the AFCA scheme at the time the complaint is made, is not an excluded complaint, and is made during the lodgement period 1 July 2019 to 30 June 2020.
The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, has encouraged small businesses impacted to lodge a complaint, but lamented the fact that AFCA could only deal with complaint around loans under $5 million.
“This is a positive step forward for small businesses who have fallen victim to financial misconduct, as AFCA previously only took complaints going back six years,” Ms Carnell said.
“Small businesses could be awarded up to $1 million in compensation if their claim is successful, and the maximum compensation for primary producers is $2 million.
“It is unfortunate that AFCA is bound by the $5 million limit, as we know of a range of cases where the small business loan was over this amount and those businesses have nowhere to go — no access to justice.
“This will go some way to providing access to justice and redress to many small businesses, but we will continue to put pressure on the government to adopt Ramsay’s supplementary report on a scheme for small businesses with complaints relating to loans over $5 million that includes options such as an independent forum to hear past disputes or government supported legal funding.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.