AFCA to ‘modify’ approach to dispute resolution

CEO and chief ombudsman David Locke said AFCA would support cross-sector initiatives that provide financial relief to consumers and small businesses facing hardship.

“AFCA recognises that strong and effective action is required to deal with these challenges,” Mr Locke said.

“We will take into account the unprecedented circumstances that financial firms are currently operating in when considering any complaints that may arise, as well as any revised regulatory standards or guidance that may apply.

“We also recognise the pressures on small-business owners and consumers at this very difficult time.”

Mr Locke said AFCA’s approach would align with revised enforcement policies outlined by the Council of Financial Regulators (CFR), which consists of Treasury, the Reserve Bank of Australia (RBA), the Australian Prudential Regulation Authority (APRA), and the Australian Securities and Investments Commission (ASIC).

In a statement issued earlier this month, the CFR noted: “For their part, APRA and ASIC will take account of the circumstances in which lenders, acting reasonably, are currently operating during the prevailing circumstances when administering their respective laws and regulations.

“Both agencies also stand ready to deal with problems firms may encounter in complying with the law due to the impact of COVID-19 through a facilitative and constructive approach.

“In particular, each agency will, where warranted, provide relief or waivers from regulatory requirements. This includes requirements on listed companies associated with secondary capital raisings, annual general meetings and audits.”

As a result, AFCA noted that while it would “prioritise and fast-track” complaints relating to the coronavirus crisis, it would “take into account the circumstances and context in which lenders and other financial firms are currently operating” when considering complaints.

AFCA acknowledged that firms may be putting in place alternate staffing arrangements and “may not be in a position to quickly act on requests for information”.

The financial complaints body also welcomed changes to responsible lending obligations proposed by the government and measures designed to better facilitate access to credit.

AFCA has encouraged firms to continue working “constructively and reasonably” with affected consumers and small businesses, and to ensure they “openly and transparently” communicate with consumers about any delays they may experience in decision making, claims or complaints handling.

Meanwhile, AFCA has established a support hotline (1800 337 444) to “ensure a priority service is provided for those impacted by the COVID-19 pandemic”.  

The dispute resolutions firm has also setup an online COVID-19 information hub with timely information for consumers and small businesses.

[Related: Responsible lending exemption issued]