AFCA will start considering historical disputes dating back to 2008 from the start of the next financial year.
The Australian Financial Complaints Authority has welcomed the government’s decision to extend its remit to consider eligible financial disputes dating back to 1 January 2008.
The external dispute resolution (EDR) body will review historical cases from 1 July 2019 to 30 June 2020 that have not previously been considered by former EDR schemes and that fall within its current monetary limits and compensation thresholds.
AFCA chief executive and chief ombudsman David Locke said the change would bring justice to more people.
“In most cases, we are currently only able to consider matters that have occurred within the last six years,” he said.
“When a complaint has been through a financial firms’ internal dispute resolution process, this time frame is reduced to two years.
“This change means that many more people will be able to get access to justice and have their matters properly considered.”
Prior to commencing its review of historical cases, AFCA said it would run a “limited consultation” on changes to its Complaint Resolution Scheme Rules, prompted by Commissioner Kenneth Hayne’s final recommendations, which include the establishment of a compensation scheme of last resort.
“A compensation scheme of last resort is a really important back-stop that ensures that people who have been the victims of misconduct and lost out through no fault of their own can finally be properly compensated,” Mr Locke said in response to the royal commission’s final recommendations.
“We look forward to working with the government to implement this important reform.”
AFCA also welcomed Commissioner Hayne’s recommendation that section 912A of the Corporations Act should be amended to require Australian Financial Services Licence holders take reasonable steps to cooperate with AFCA in the resolution of disputes, including by providing all relevant documents and records relating to issues in dispute.
The updated rules will need to be approved by the Australian Securities and Investments Commission.
AFCA said it will release guidance prior to 1 July 2019 to explain how financial services customers can raise issues with the EDR body.