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RG 271: Escalating a Complaint to AFCA

For businesses in the financial services industry and their clients, the Australian Financial Complaints Authority (AFCA) serves as a way to impartially resolve complaints in a fair, fast and effective manner. 

When complaints aren’t resolved by the financial firm themselves, the complainant has the right to escalate their grievance to AFCA, who will then make a determination of the outcome of the complaint. 

With ASIC’s RG 271 coming into effect October 5, financial services businesses will have to ensure that the complainants know of this right. 

What Is AFCA?

AFCA is the dispute resolution scheme that assists customers and small businesses reach an agreement on their complaints against financial firms.

They are an impartial and independent body who advocate for neither party. 

Instead, they aim for a fair and effective resolution that makes sense for all involved. When an agreement is made and is accepted by the complainant, this can be binding on the financial services business.

How Has RG 271 Changed Financial Firm’s Obligations In Relation To AFCA?

Considering the incoming changes for internal dispute resolution (IDR) processes in the financial services sector, it’s important that businesses ensure they are RG 271 Compliant

A part of the updated requirements relates to escalating complaints to AFCA.

In ‘Enforceable Paragraph RG 271.111 - RG 271.113’, RG 271 states that a firm’s IDR process must require them to:

(a) inform the complainant that they have a right to pursue their complaint with AFCA; and 
(b) provide details about how to access AFCA.

These details must be included in the IDR response and IDR delay notifications that financial institutions are required to provide to the complaining party, under RG 271. 

For those using a purpose-built complaints software like Complaints Pro®, these changes will be seamless.

Causia’s industry specific complaints and compliance solution is able to:

  • Support complex processes for AFCA requests including managing IDR timelines with an open IDR and receiving AFCA requests.
  • Track AFCA streams, resolution point and stages for comprehensive reporting and reconciliation with AFCA invoices.

As an Australian-made software, we are fully aware of all the compliance requirements and have made it simple to meet your obligations.

What Is The Process For Escalating a Complaint?

Under RG 271, the firm must inform the complainant of their right to escalate to AFCA and if it is not solved internally, the client might choose to pursue this route.

So what happens next?

For complainants, make sure to check out what to do before making a complaint to AFCA. Once you are informed, you can lodge the complaint with them online, via email or by telephone. 

There, AFCA will gather all relevant information from the complainant and typically try to resolve the complaints through informal methods. If this negotiation or conciliation does not work, they will then pursue more formal methods.

Source: afca.org.au

Any determination or decision that AFCA makes is binding to the financial firm, and in cases that involve superannuation, will be binding to both parties.

Additionally, as outlined in RG 271;

“A financial firm may wish to directly refer a complaint to AFCA for resolution. This may occur where a firm has given an IDR response to the complainant, but the complaint remains unresolved and the complainant has not escalated it to AFCA. Firms wishing to make such a referral need to obtain the consent of the complainant(s) to do so.” (RG 271.115)

While AFCA is a great mechanism for when you really need it, at Causia® we believe it is best to ensure that your complaints system is comprehensive enough that any disputes that can be solved internally, are. 

Of course, escalations are sometimes unavoidable. Your system needs to be able to simply manage multiple AFCA requests at once, as well as keeping in line with other RG 271 requirements.

With Complaints Pro®, your complaints system will have all of the in-built features you need to ensure compliance. As it is fully customisable, you can choose the aspects that matter most to your company and streamline the software. 

Managing complaints and ensuring compliance has never been easier.

Contact us today for more information or book a demo now!


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