AFCA reinforces empowerment of Federal Court decision

Mike Taylor

Managing Editor/Publisher, Financial Newswire

27 January 2023

The Australian Financial Complaints Authority (AFCA) has chosen to reinforce that a ruling by the Federal Court has affirmed the requirement for firms to cooperate or face the consequences.

The Federal Court ruling was delivered following action pursued by the Australian Securities and Investments Commission (ASIC) against two home finance companies – General Commercial Group Pty Ltd and Eden Capital (Australia) who were each penalised $50,000 for failing to cooperate with AFCA.

This prompted AFCA chief ombudsman, David Locke, to reinforce that the court’s ruling “recognised the need for financial firms to cooperate with AFCA”.

The Federal Court found the failure of the two firms to co-operate with AFCA constituted a breach of the National Consumer Credit Protection Act. The judgment said the respondents had

• failed to provide documents and information requested by AFCA
• commenced proceedings against complainants and an AFCA staff member
• had been uncooperative in communications with AFCA
• initially failed to pay an AFCA determination

Locke said AFCA had summarised the behaviour it expects of all users of its service – including firms, complainants and AFCA employees – in the AFCA Engagement Charter.

He pointed out that, key to the Charter is AFCA’s expectation that all parties cooperate reasonably with the common goal of bringing finality to a complaint.”.

“AFCA recognises that a financial dispute can be stressful, but we require all parties to engage with our staff and each other in a co-operative and respectful manner at all times,” he said.