Do AFCA case managers give false hope and unrealistic expectations?
Superannuation funds have pointed to Australian Financial Complaints Authority (AFCA) case managers being too focused on making consumers feel like they’ve been heard and giving them unrealistic expectations.
The funds have also suggested that, in some cases, unmeritorious complaints are proceeding through AFCA’s complaint management process even though it is clear they will not succeed.
The Association of Superannuation Funds of Australia (ASFA) has used a submission to AFCA to state that its member superannuation funds “frequently report being told by AFCA case managers that going through the complaint management process helps complainants to “feel that they have been heard”.
It is not lost on those superannuation funds that AFCA is paid for running that complaints process.
The ASFA submission said that while it might be true that complaints felt better, it also risked creating or magnifying unreasonable expectations “if a complainant assumes, because their complaint is progressing, that the outcome will be in their favour”.
“Where the complaint is ultimately resolved in favour of the financial firm, this is often met with surprise and a sense that they were given ‘false hope’, particularly where some months have elapsed since the complaint was lodged with AFCA.,” it said.
“One ASFA member provided us with an example where the dispute was eventually resolved in the trustee’s favour, on the basis the trustee had made no error, but it took six months to obtain that outcome. Further, this approach is evidently being applied even though it should, in our view, be clear that neither the complainant nor the financial firm is likely to change their position.”
“In an example provided to us, an ASFA member fund was requested to engage in conciliation in a case where the trustee had made no error and could not legally provide the remedy sought.”
The ASFA submission said that it supported the provision of a cost-free rsolution mechanism for consumers “however, it must always be remembered that this is possible only because of the costs of EDR are borne by the AFCA members”.
“Where an unmeritorious complaint against a superannuation fund progresses unnecessarily far through the process, the fund incurs significant cost, both in terms of resources expended to respond to the complaint and the complaint management fees charged by AFCA. This cost is ultimately borne by all superannuation fund members. An ASFA fund member provided an example where a complainant refused to accept AFCA’s original finding that no error had been made in relation to their account and demanded review by an ombudsman, which was progressed by AFCA. The final determination confirmed that the trustee had made no error, however this was at significant cost to the fund.”
Ah Kangaroo court AFCA with its usual consumer must win something, anyway approach.
Hey Industry Super, imagine all those unqualified & uneducated call centre jockeys flogging a single product under so called Sales / QAR Advice”.
AFCA’s going to be real busy.
These call centre jockey complaints better not be regarded as Real Advisers complaints.
Your assuming of course that AFCA will treat the hallowed Industry funds the same. Which they won’t.
AFCA is a rogue regulator. It adds unnecessary cost and complexity to the advice process, by forcing licensees to build defensive layers against potential vexatious complaints that AFCA encourages, and biased processes and judgements AFCA imposes. It forces up the cost of advice for consumers and reduces consumer access to professional advice. Financial advice already has more than enough regulators.Financial advice must be removed from AFCA’s jurisdiction ASAP.
AFCA is conveniently biased to consumers and against advisers. What this has spawned is a number of quasi legal firms (including the main ambulance chasers) who rely on the Case Managers doing their work for them to extract payments from members. I was the last custodian/case manager for the FSCRS which was the original scheme set-up by the FPA and its purpose and the reason subsequent iterations of the ombudsmen are given such wide ranging powers was to encourage matters to be settled outside the court system. Members are now faced with the joint force of the Case Manager and their Legal adviser operating a system that would not stand scrutiny in the courts and the original purpose of the Ombudsmen scheme has been lost.
Thanks MOM , that made my day. Not
ASDAA’s latest submission can be found here
https://www.asdaa.com.au/submissions
We are of the view that the first place to start would be in the AFCA Complaint form. We note that section 4 requests the complainant to provide the Financial Firms details however does not require the Complainant to provide any information about the nature of the relationship between them and the Financial Firm.
AFCA are accepting and processing complaints from persons who are not in fact clients/customers of the FSP. Even when the FSP clearly informs AFCA of this fact, AFCA are loath to kick/close to complaint. AFCA fails their own rules like Rule A.4.3