AFCA urges equal liability regime for scams

Mike Taylor

Managing Editor and Publisher

29 January 2025

At the same time as financial advisers continue to complain about the funding model for the Compensation Scheme of Last Resort (CSLR), the Australian Financial Complaints Authority (AFCA) is urging a liability regime traversing all sectors for the Scams Prevention Framework (SPF).

AFCA has made clear its support for the “shared responsibility framework” envisaged by the legislation.

In a submission filed with the Senate Economics Legislation Committee AFCA said it considered it essential that “the liability regime applies consistently across all sectors” and “relevant SPF rules and codes have identical settings for apportionable claims under the SPF so that IDR, EDR and any remediation process can produce consistent outcomes in making a consumer ‘whole’ following scam losses”.

“A ‘shared responsibility framework’ means that each participant has a role to play to support timely and comprehensive resolution of complaints,” AFCA said.

“To achieve this will require all participants to:

* re-imagine key elements of dispute resolution as it currently operates

* shift from a ‘current state’ that decides complaints and apportions liability on a case-by-case basis which can be complex, costly and distressing to scam victims

* consider and develop models such as standardised decision trees, for example, that clearly and consistently apportion liability when obligations have not been met by one or more parties.

“AFCA stands ready to contribute to the development of an Australian model for a ‘shared responsibility framework’ for scams that prioritises early resolution, group complaints handling, shared responsibility tables to support liability apportionment and the adoption of a remediation lens,” it said.

AFCA pointed out in its submission that, under the proposed SPF, “it is intended that AFCA be authorised as the single EDR scheme for the first three designated sectors – banking, telecommunications and digital platforms.