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The professional bodies are welcoming proposed amendments to the AFCA rules as they attempt to “improve accountability and transparency”.
Joint bodies voice support for AFCA rule amendments
24 June 2025
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9 minute read
The accounting bodies have voiced their support for proposed amendments to the AFCA rules across scams, paid representatives, financial firm failure to comply with an AFCA determination and legacy complaints.
In response to the AFCA Consultation paper on the proposed amendments, CA ANZ, CPA Australia, the Institute of Public Accountants, the Financial Advice Association Australia (FAAA) and the SMSF Association said it was appreciated that the change were being made to reflect changes to the law or to address the historical nature of the Legacy complaints provisions.
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“We also recognise that some of these changes are being done to provide AFCA with additional powers to deal with AFCA members and third parties who are not complying with the expectations of AFCA. These are relevant matters that we believe should be addressed,” the bodies said.
In its submission, the joint bodies supported the proposed amendment to force paid representatives to use approved AFCA processes and for AFCA to refuse to deal with a third party where they were not a member of AFCA, despite being required to do so by their AFS licence.
The ability to exclude a paid representative from the AFCA service where they had repeatedly failed to comply with the AFCA requirements was also broadly supported.
“We firmly support the ability for complainants to access AFCA without the need to incur fees being paid to third parties to assist in the submission of complaints, however, we accept that in some cases a complainant may wish to seek the support of a third party.”
“With respect to paid representatives, this does not come without impact, including the prospect, in some cases, of losing a very substantial proportion of any monetary benefit obtained as a result of achieving a determination.”
According to the bodies, enforcing this element of the regime was “very important” as the protections were viewed as appropriate protections to avoid complainants being exposed to “unscrupulous third parties”.
It was suggested that the cost of AFCA’s complaints handling services remain unchanged, based on them being significantly high, making it unfair for financial firms to be pushed higher by paid representatives refusing to follow approved processes and procedures.
The bodies added that they believed it would be beneficial for AFCA to share more information with respect to the scale of issues associated with the cost of the complaints handling service, as “it would be helpful to understand the scale of non-compliance with requirements and an estimate of the number of paid representatives who are operating without the necessary AFCA membership” and the impact this had on AFCA’s costs.
The bodies also strongly supported the addition of a new rule to enable AFCA to publicise the failure of financial firms to comply with AFCA determinations.
This was attributed to the concerning number of firms (64) that had failed or refused on at least one occasion to give effect to a determination within the year to 31 March 2025.
This was also a concern based on the failure of financial firms to pay AFCA determinations and the resultant impact on the Compensation Scheme of Last Resort (CSLR) being an important issue for the various bodies and their members.
“The cost of the CSLR is a major threat to the financial advice sector. We strongly support greater publicity with respect to those who fail to pay, enabling other participants in the financial services industry to those entities that have contributed to the cost of the CSLR.”
“We believe that greater awareness of these unpaid determinations is both important and a strong disincentive to those responsible for businesses that put clients in this position. Consumers of financial services should have visibility of firms that have failed to meet their obligations, particularly where related entities of those failed firms are continuing to operate. It will also help financial firms to hold other firms accountable and facilitate the reporting of business phoenixing activity.”
In addition to these two proposed amendments, the joint bodies supported the position of receiving banks being held accountable for where they had negligently facilitated the receipt and onward transfer of funds obtained based on the activities of a scammer.
Though the submission supported the amendment, it was noted that a “lack of expertise” in the subject area prevented the bodies from being able to fully respond to the amendment.
The bodies also outlined that while it was noted AFCA was not seeking feedback on legacy complaints provisions, it was believed to be an appropriate amendment in the context of the provisions’ historical and out-of-date nature.
“We believe that the proposed rules amendments are appropriate and if implemented in a consistent manner should assist AFCA to provide more timely, efficient and effective dispute resolution services.”
“We firmly believe that these proposed Rules amendments are fair for all parties, to help promote an efficient EDR service.”
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