AFCA predicts ‘much lower’ claims handling increase
The Australian Financial Complaints Authority (AFCA) has defended and sought to clarify its claims handling costs in the face of concerns generated by an actuary’s report forecasting a ‘huge’ increase with impacts on the Compensation Scheme of Last Resort funding.
The AFCA says it expects its costs to be lower than those indicated by the CSLR actuary’s report.
The Financial Advice Association of Australia (FAAA) had expressed concern that a CSLR actuarial forecast suggested that AFCA’s costs for handling claims would escalate from $12,450 per claim in 2024/25 to $21,334.
Reacting to the concerns raised by the FAAA, AFCA chief operating officer, Justin Untersteiner pointed out that, consistent with the CSLR legislation, AFCA is a not-for-profit organisation and “we are recovering our costs and no more this work”.
He also stressed that the actuarial figure provided with respect to the CSLR was a projection – “an estimate based on its assumptions, including about the cost of AFCA determinations that are yet to be finalised”.
“Estimates made by the CSLR are a matter for the CSLR, however our estimate of the cost per determination for the period in question is much lower than the assumption in the report,” Untersteiner said in response to a report of the FAAA’s concerns.
“Our aim as we continue to do this work is to develop further efficiencies of scale that will lead to lower costs per complaint. We are confident this will happen.”
“We are aware of the industry’s wish to keep the costs of the CSLR to a minimum but also that the industry has called for these complex matters to be addressed in a rigorous and robust way,” Untersteiner said. “We continue to balance those considerations.”
If someone in my employ came up with such a limp reply – they would be terminated. To say the actual cost will be “less” than the estimate is nothing short of pure obfuscation. “their costs are an internal matter” – what a load of poppycock!! AFCA is not performing, here goes CSLR which looks to expand their brief. Not for profit is no excuse for over spending the moneys of others. Our leaders should be whiter than white. We need better and, more importantly, accountable leaders here ASAP.
Advisers should not be coping the bill for rogue banks, and criminal acts of others. This is not the responsibility of good hard working advisers and is pure theft.
Go to the courts and retrieve this money like you would in any other industry. What we have already paid and what the government is trying to take from us now is entirely unjust, and i believe illegal.
I ask all affected to consider a joint claim against the government for this theft from business owners in our industry. A class action to recover these monies.