ANZ considers that the Board structure and composition
‘has worked well for FOS, ensuring confidence in FOS from consumer and industry
groups alike and provided longevity and stability to the organisation.’[160]
The Australian Institute of Superannuation Trustees states
that the fundamental differences between the retail and profit-to-member
superannuation industry warrant the allocation of at least one board position
for a representative from the profit-to-member superannuation industry.[161]
Comment
In relation to the operational requirement that there be
‘appropriate expertise’ to deal with both superannuation and non-superannuation
complaints, the ALA has suggested that the ‘availability of independent experts
who have the confidence of both parties’ would better facilitate the timely and
effective resolution of a dispute. In practical terms the ALA suggests an
amendment to the Bill ‘to require AFCA to consult the parties to a complaint
and take into account their preferences as to the nature and even identity of
the expert(s) to be engaged’.[163]
The Financial Planning Association of Australia recognises
that financial disputes can involve complex issues and use of expertise is
important in the proper understanding of professional practice and standards.
Accordingly it recommends a change to the drafting of proposed paragraph 1051(4)(c)
from a requirement that ‘appropriate expertise should be available to deal with
complaints’ to ‘appropriate expertise is used to deal with complaints’. The
Association argues that this change would ‘focus attention on expected
performance rather than mere capability’.[164]
The Australian Small Business and Family Enterprise
Ombudsman believes the drafting of the requirement for AFCA to take ‘reasonable
steps’ to ensure compliance by members of the scheme with the determinations,
is unsatisfactory given that consumers and small businesses cannot afford to go
to court. [165]
As already mentioned, this potential shortcoming has also been identified by
ALA.[166]
It has been suggested that as a starting point, there should be an enforceable
time limit for determinations to be actioned.[167]
The compliance requirements set out in proposed
subsection 1051(5) are:
- the
operator is under an obligation to ensure compliance in relation to the
following:
- conditions
of the authorisation of the EDR scheme specified by the Minister
- regulatory
requirements issued by ASIC under proposed section 1052A
- directions
by ASIC under proposed sections 1052B or 1052C
- requirements
to refer certain matters to appropriate authorities under proposed section
1052E
- material
changes to the scheme are not to be made without the approval of ASIC under proposed
section 1052D.
General considerations
Proposed section 1051A specifies the general
considerations that the Minister must take into account when considering
the authorisation of the EDR scheme. These are the accessibility, fairness,
independence, accountability, efficiency and effectiveness of the scheme.
The Bill itself contains no further articulation of what factors
may inform these considerations under proposed section 1051A. Instead, some
guidance is offered by the Explanatory Memorandum which states, for example:
When considering whether the EDR scheme is ‘accessible’, the
Minister may consider matters such as:
- whether the scheme will make it
easy for consumers and small businesses to lodge a complaint;
- whether the scheme will be actively
promoted to ensure that consumers and small businesses are aware of the
scheme’s existence; and
- whether the [terms of reference] for the scheme sets
out the types of complaints that can be considered by the scheme.
When considering whether the EDR scheme is ‘independent’, the
Minister may consider matters such as:
- whether the decision-making will be
independent; and
- whether there will be sufficient funding for the scheme
When considering whether the EDR scheme is ‘fair’, the
Minister may consider matters such as whether the complaints handling
procedures of the scheme will accord with the principles of natural justice and
industry best practice.[168]
It is unclear as to why such helpful guidance has not
been included in the actual Bill.[169]
Division 2—Regulating
the AFCA scheme
ASIC will be in charge of ongoing oversight of AFCA,
making certain that AFCA satisfies the standards set out in the legislation.
Accordingly, this Division of proposed Part 7.10A sets out ASIC’s powers in regulating
the AFCA scheme and AFCA’s reporting obligations to relevant authorities, as
well as providing ASIC with a general directions power to compel AFCA to comply
with standards in the legislation and in regulatory requirements.
Proposed section 1052 provides that AFCA must
ensure that the mandatory requirements for the AFCA scheme under section 1051
are complied with.
Proposed section 1052A provides that ASIC may, by
legislative instrument, issue to AFCA regulatory requirements relating to compliance
with the mandatory requirements or any of the general considerations for the
AFCA scheme. The Explanatory Memorandum states that this provision is intended
to have ‘a broad application so that ASIC has the flexibility to determine the
requirements that AFCA must comply with in order to effectively comply with the
mandatory requirements and the general conditions.’[170]
Furthermore, ‘ASIC may issue and update the regulatory requirements at any
time.’[171]
ASIC will also be given the power to issue directions to
AFCA requiring it to increase prospectively monetary limits for the value of
claims or remedies (proposed section 1052B).
Comment
Concern has been raised that the increased monetary limits
and compensation caps could have a flow-on effect on the cost of professional
indemnity insurance premiums. This may give larger banks and insurers a
competitive advantage over smaller financial firms.[172]
ASIC’s
general directions power
Where ASIC considers that AFCA has not done all things
reasonably practicable to ensure compliance with the mandatory requirements of
the scheme, a condition of the authorisation of the AFCA scheme imposed by the
Minister, or regulatory requirements issued under proposed section 1052A.
Proposed section 1052C gives ASIC a general
directions power to give AFCA written notice of its intention to give a
specified direction. That notice must set out specific measures that the direction
will require AFCA to take to comply with the requirements or condition and provide
reasons for the notice of intention to issue a direction (proposed
subsections 1052C(1) and (2)). If, after receiving the notice, AFCA does
not take the specified measures, ASIC may give the direction if it is still
considered appropriate to do so (proposed subsection 1052C(3)). This
general directions power is aimed at ensuring compliance with the requirements
or conditions of the AFCA scheme. AFCA may vary or revoke such a general
direction (proposed subsections 1052C(8) to (10)).
Time to comply and compliance with a general direction
ASIC’s direction to AFCA must state the time by which, or
the period during which, that direction is to be complied with. The time or
period must be reasonable (proposed subsection 1052C(4)).
The direction issued by ASIC is not a legislative
instrument and if AFCA fails to comply with the direction, ASIC may apply to a court
for an order that AFCA comply with the written direction (proposed subsections
1052C(5) and (7)).
Failure to comply with a direction may also result in the
Minister revoking the authorisation of the AFCA scheme (proposed subsection
1052C(6)).
ASIC’s approval
of ‘material’ changes to the AFCA scheme
A key mandatory requirement of the AFCA scheme is that a
material change must not be made to the scheme without ASIC’s approval (proposed
paragraph 1051(5)(b)). AFCA may request ASIC to approve a material change
to the AFCA scheme and ASIC may approve such changes by providing a written
notice to AFCA (proposed subsections 1052D(1) and (2)).
In considering whether to approve the change, ASIC must
take into account the mandatory requirements and the general considerations for
the scheme, and any other conditions imposed by the Minister on the
authorisation of the scheme (proposed subsection 1052D(3).
Referring
matters to appropriate authorities
Proposed subsection 1052E(1) provides that if AFCA
becomes aware, in connection with a complaint under the AFCA scheme, that
- a
serious contravention of any law may have occurred
- a
contravention of the governing rules of a regulated superannuation fund or an
approved deposit fund may have occurred
- a
breach of the terms and conditions relating to an annuity policy, a life policy
or an RSA may have occurred or
- a
party to the complaint may have refused or failed to give effect to a
determination made by AFCA.
AFCA must give particulars of the contravention to ASIC,
APRA and/or the Commissioner of Taxation, as appropriate. In similar
circumstances as those outlined above, where a complaint relates to the scheme
provided for by the Australian
Defence Force Cover Act 2015, such particulars must be provided to the Ministers
administering that Act and the Public Governance,
Performance and Accountability Act 2013 (proposed subsections
1052E(1) and (2)).
If a complaint made under the AFCA scheme is settled
between the parties, AFCA may also give the particulars of the settlement to
APRA, ASIC and/or the Commissioner of Taxation if AFCA believes that the
settlement requires further investigation by any of these agencies. If AFCA
considers there is a systemic issue arising from the consideration of
complaints under the AFCA scheme, AFCA must give particulars of the issue to
one or more of APRA, ASIC or the Commissioner of Taxation, as appropriate (proposed
subsections 1052E(4)).
Division
3—Additional provisions relating to the resolution of superannuation complaints
This Division sets out additional provisions required to
resolve uniquely complex superannuation complaints, in addition to imposing
secrecy obligations on the part of AFCA staff in relation to information
obtained under these provisions.
Superannuation
complaints
As superannuation complaints will transition from a tribunal
structure to an ombudsman-type scheme, key features of the existing complaints
handling model, including the requirements for handling death benefit
complaints (with time limits), the decision‑making test and the unlimited
monetary jurisdiction are basically reproduced in this Bill. This reflects the
particular nature of and requirements for appropriately handling such
complaints, in addition to the need for certainty to be given to stakeholders.
Including additional provisions in relation to superannuation complaints will
ensure that AFCA is established with the required processes in place to properly
handle these types of disputes.
When complaints relating to superannuation can be made
under the AFCA scheme
Proposed section 1053 provides that, subject to
section 1056[173]
under the AFCA scheme, a person can make a complaint relating to superannuation
only if the complaint relates to one of the specified decisions or types of
conduct and the complainant alleges that the decision or conduct was unfair or
unreasonable. Examples of the types of decisions or conduct enumerated under
proposed section 1053 are:
- a
complaint that the trustee of a regulated superannuation fund or
of an approved deposit fund has made a decision in relation to a
particular member or former member, or a particular beneficiary or former
beneficiary, of the fund
- a
complaint relating to decision, by a trustee maintaining a life policy
that covers a member of a life policy fund, to admit the member to the fund
- a
complaint relating to the conduct (including an act or omission) of an insurer
or a representative of an insurer in relation to the sale of an annuity
policy
- a
complaint relating to the conduct (including an act or omission) of an RSA
provider or a representative of an RSA provider in relation to opening
an RSA.
Specific
additional powers relating to superannuation complaints
The Bill provides for the following specific additional powers
that will apply in relation to superannuation complaints:
Joining
other parties to a superannuation complaint
Proposed subsection 1054(1) generally gives AFCA the
power to join any of the following parties to a superannuation complaint:
- a
person who has applied to become a party to the complaint
- a
trustee of a regulated superannuation fund or an approved deposit fund
- an
insurer
- an
RSA provider
- a
superannuation provider and
- a
person responsible for determining either or both the existence and extent of a
person’s disability.
Power to
obtain information and documents
Proposed subsection 1054A(1) provides that if
AFCA has reason to believe that a person is capable of giving information or
producing documents relevant to a superannuation complaint, AFCA may, by
written notice, require the person to give such information, or produce such
documents at a specified date and time. If the person fails to comply they
commit an offence (of strict liability) and will be liable to a maximum penalty
of 30 penalty units, unless they have a reasonable excuse (subsections
1054A(3), (4) and (5)).[174]
Comment
The SBFEO considers that power to obtain relevant information
is critical to the proper assessment and handling of superannuation complaints.
However, it notes that this power to obtain information and documents does not
similarly exist for non-superannuation complaints. The SBFEO points out that the
ability to obtain information and documents exists under current arrangements,
and the inclusion of such an explicit power in the Bill would provide the
necessary certainty as to the EDR’s ability to obtain information in a dispute.[175]
Power to
require attendance at conciliation conferences
If AFCA thinks it desirable to do so, it may give notice in
writing to each party to a superannuation complaint and any other person who
AFCA believes is likely to be able to provide information relevant to the settlement
of the complaint or whose presence at a conciliation conference would, in
AFCA’s opinion, be likely to be conducive to settling the complaint, to require
the party or other person to attend the conference (proposed subsection
1054B(1)).
If the complainant fails to attend the conference, AFCA may
deal with the complaint as if it had been withdrawn by the complainant (proposed
subsection 1054B(3)). A person (other than the complainant) commits an
offence if he or she does not attend a conference when required to do so, and will
be liable to a maximum penalty of 30 penalty units (proposed subsection
1054B(4)).[176]
Placing
matters before the Federal Court
Proposed subsection 1054C(1) provides that AFCA may,
on its own initiative or on the request of a party in relation to a superannuation
complaint, refer a question of law arising in relation to the making of a
determination relating to the complaint to the Federal Court for decision.
When superannuation
complaints relating to death benefits cannot be made under the AFCA scheme
Proposed section 1056 provides that a person cannot
make a complaint in relation to a decision about the payment of a death benefit
in the following circumstances:
- the
person does not have an interest in the payment of a death benefit
- the
person received notice that the decision-maker proposed to make the decision
and that the person may object within 28 days of receiving that notice, and the
person did not object in writing within that time period
- the
person received notice of the decision-maker’s final decision relating to the
payment of a death benefit, and that notice specified that the person must make
a complaint to AFCA within the period of 28 days after receiving notice, the
person did not make the complaint within that 28 day period.
Thus, a person who received a notice of the decision-maker’s
proposed decision and notice of the final decision cannot make a complaint to
AFCA unless two limbs are satisfied:
- the
person objected to the proposed decision within 28 days after receiving the
notice and
- the
person made a superannuation complaint about the final decision to AFCA within
28 days after receiving the notice.
The Explanatory
Memorandum states that the 28 day limitation period is designed to provide ‘the
death benefit decision-maker and the beneficiaries with a degree of certainty
about the final decision to pay the death benefit’.[177]
However, the ALA has suggested that the 28 day limitation
period may be insufficient ‘time for the consumer to engage a legal
representative, enable that representative enough time to consider the
available evidence and take instructions on matters which may have been
longstanding and complex and then prepare and issue appeal proceedings’.[178]
ALA proposed an amendment recommending the appeal period be extended to at
least 35 days.[179]
Proposed subsection 1057(1) provides that a party to
a superannuation complaint may appeal to the Federal Court, on a question of
law, from AFCA’s determination of the complaint.
Determinations
of superannuation complaints
In making a determination in relation to a superannuation
complaint, AFCA will generally have all the powers, obligations and discretions
conferred on the trustee, insurer, RSA provider or other decision-maker who
made the original decision or engaged in conduct to which the superannuation
complaint relates (proposed subsection 1055(1)). The Explanatory
Memorandum states that ‘this is consistent with the current powers of the SCT’.[180]
Affirming
decisions or conduct
AFCA must affirm a decision or conduct (except a decision
relating to the payment of a death benefit) if AFCA is satisfied that the
decision, in its operation in relation to the complainant, or the conduct was
fair and reasonable in all the circumstances (proposed subsection 1055(2)).
AFCA must affirm a decision relating to the payment of a
death benefit if AFCA is satisfied that the decision, in its operation in
relation to the complainant and any other person joined under subsection
1056A(3) as a party to the complaint, was fair and reasonable in all the
circumstances (proposed subsection 1055(3)).
AFCA may also make a determination which varies the original
decision, or sets aside the decision and substitutes a new decision. It may
also set aside the original decision and remit the decision back to the
original decision-maker with directions (proposed subsections 1055(4) and
(5) and paragraphs 1055(6)(a) and (b)).
Limitations
on determinations
AFCA must not make a determination of a superannuation
complaint that would be contrary to law, the governing rules of a regulated
superannuation fund or approved deposit fund, or the terms and conditions of
the annuity policy, contract of insurance or RSA to which the complaint relates
(proposed subsection 1055(7)).
Comment
The SCT has noted and clarified that while proposed
section 1055 broadly provides for the same powers when making a determination
as those currently available to the SCT, it does not replicate section 37A of the
Superannuation
(Resolution of Complaints) Act 1993. Significantly, section 37A
‘provides a power to cancel the membership of a life policy fund if the SCT
finds the conduct relation to the selling of that fund was unfair or
unreasonable’.[181]
Written
reasons for determinations
Proposed section 1055A imposes a mandatory
requirement on AFCA to provide written reasons for its determination of a superannuation
complaint.
Secrecy
Proposed Subdivision F of Division 3 of new Part 7.10A contains
a number of secrecy provisions. All personal information provided to AFCA will
be subject to the Privacy
Act 1988, which regulates how personal information is handled.[182]
As already mentioned, AFCA will be given statutory powers
that can be used to compulsorily obtain information in relation to a
superannuation complaint. Subject to specified exceptions, the secrecy
provisions make it an offence to disclose or make records of information, or
produce or permit access to documents, compulsorily acquired by an AFCA staff
member under proposed section 1054A in connection with a superannuation
complaint or obtained during a conciliation conference (proposed section
1058).
Part 2—Amendments
applying once the first authorisation of an external dispute resolution scheme
comes into force
The key amendment under this part is item 11, which
provides that the Administrative
Decisions (Judicial Review) Act 1977 (ADJR Act) will not apply
to decisions or determinations made by AFCA in relation to superannuation
disputes.
The Explanatory Memorandum states:
As is the case for determinations made by ASIC approved
industry schemes, the Administrative Decisions (Judicial Review) Act 1977
will not apply to determinations by AFCA in relation to financial disputes
(non-superannuation financial disputes). This is because those determinations
would not be made under an enactment.[183]
The SCT, CPSU, FSU and the Australian Institute of
Superannuation Trustees have expressed concern about the loss of appeal rights
for parties by this amendment to the ADJR Act to remove ‘the right for
an effected person to appeal a decision exercising a statutory power.’[184]
Schedule 2—Internal
dispute resolution
Under the existing laws, financial and credit service
firms, superannuation funds and approved deposit funds are required to have an
internal dispute resolution (IDR) scheme which complies with ASIC standards and
requirements. Retirements Savings Accounts providers face similar requirements
under section 47 of the Retirement Savings Accounts Act 1997 (RSA Act).[185]
IDR is the first and the primary avenue for aggrieved consumers to seek
resolution of their complaint and a gateway to EDR.[186]
The Ramsay Review was asked to provide recommendations on:
the role, powers, governance and funding arrangements of the
dispute resolution and complaints framework in providing effective complaints
handling processes for users, including linkages with internal dispute
resolution [emphasis added].[187]
The Ramsay Review made the following findings which have
informed the proposed amendments under Schedule 2.
No
comprehensive, consistent, comparable, publicly available IDR data.
Data on IDR outcomes is limited and inconsistent, which
means that it is difficult to determine the effectiveness of IDR and whether it
is leading to improved consumer outcomes over time.[188]
ASIC does not have the power to collect recurring data
about financial firms’ IDR activities. Firms are not currently required to
report this information externally unless they subscribe to an industry code of
practice.[189]
There is no public reporting of complaints dealt with by
superannuation funds at IDR.[190]
To address this situation:
The Panel’s draft recommendation was to require financial
firms to publish information and report to ASIC on their IDR activity, with
ASIC having the power to determine the content and format of IDR reporting.[191]
Informed by the Ramsay Review findings and recommendation,
Schedule 2 proposes amendments to the ASIC Act, Corporations Act,
National Consumer Credit Protection Act 2009, RSA Act and the SIS
Act, to create an enhanced IDR framework by inserting provisions with
requirements for improving transparency and accountability of firms' IDR
practices. The amendments also provides for ASIC to publish IDR data, including
firm-level data that identifies firms. The Explanatory Memorandum provides that
‘this will allow ASIC to improve transparency about the performance of
financial firms in relation to their IDR activities.’[192]
IDR Firms subject to IDR Enhanced Framework
‘IDR firms’ are all financial firms that are required to
participate in the enhanced IDR framework. Where a firm is an AFS licensee,
product issuer for the purposes of section 1017G of the Corporations Act
or an Australian credit licensee, generally the enhanced framework will apply (items
2, 4 and 5 of Schedule 2). Trustees of regulated superannuation funds or
approved deposit funds and RSA providers are required to be part of the new IDR
framework (items 6 to 9). Furthermore, it is a requirement that each
trustee of a regulated superannuation fund other than a self -managed
superannuation fund, or of an approved deposit fund, and RSA providers have an IDR
procedure that complies with the standards and requirements mentioned in
subparagraph 912A(2)(a)(i) of the Corporations Act in relation to
financial services licensees (items 7 and 9 of Schedule 2, proposed paragraph 47(1)(b)
of the RSA Act and proposed paragraph 101(1)(b) of the SIS Act).
IDR
reporting requirements
As part of the enhanced requirements, IDR firms will be
required to provide ASIC with any information specified in an ASIC legislative
instrument relating to the operation of the firm’s IDR procedures (items 2,
4, 5, 7 and 9 of Schedule 2).
As already indicated, ASIC will be given the power to specify,
by way of legislative instrument, the information that IDR firms must provide
about their IDR procedures and the operation of those procedures. However, ASIC
cannot require IDR firms to include in their reports, ‘personal information’
within the meaning of the Privacy Act (item 3).
ASIC may
publish internal dispute resolution data
Proposed section 243C of the ASIC Act, at item
1 of Schedule 2, provides that ASIC may publish information relating to IDR,
including information that is derived from such data.
Requirements
for certain trustees and RSA providers to provide written reasons for decisions
in relation to complaints
Currently, section 101 of the SIS Act imposes a
requirement on the trustees of regulated superannuation funds (other than
SMSFs) and approved deposit funds to give written reasons for decisions they
make in response to complaints made by beneficiaries, former beneficiaries and
other interested parties. Item 9 of Schedule 2 repeals these
requirements in section 101 of the SIS Act and replaces them with amendments
that empower ASIC to specify requirements about providing reasons for IDR
decisions in a legislative instrument (proposed subsections 101(1), (1A) and
(1B) of the SIS Act). Item 7 makes a similar amendment in
relation to RSA providers (proposed subsections 47(1), (2) and (2A) of
the RSA Act).
Schedule 3—Repeal
of the Superannuation (Resolution of Complaints) Act 1993
Part 1 of Schedule 3 to the Bill contains one item
which repeals the whole of the Superannuation
(Resolution of Complaints) Act 1993. That Act provides the basis for
the establishment and function of the SCT as an independent statutory body, with
functions of providing for the conciliation of complaints and for the fair,
economical, informal and quick review of the decisions of trustees, if
required.[193]
This body is being abolished and replaced by AFCA.
Part 2 of Schedule 3 makes a number of necessary
consequential amendments to give legal and practical effect to the repeal made
by item 1.
The proposed amendments in Schedule 3 commence on a day to
be fixed by proclamation. However, if a day has not been fixed by proclamation
within a period of four years, the repeal will automatically commence four
years after the day of Royal Assent (Item 8 of commencement table at clause
2 of the Bill). According to the Explanatory Memorandum, the purpose of a
transitional period of up to four years is to enable:
the SCT to finalise any complaints it has received before the
day when it cannot receive new complaints. This will include dealing with any
complaints which are remitted back to the SCT from the Federal Court during
this period of time.[194]
Comment
The SCT acknowledges that time is needed for AFCA to
become operational and the corresponding wind-up of the SCT. However, the SCT
states:
the 2017-18 budget did not provide resourcing to enable the
SCT to resolve existing complaints by 30 June 2020. Based on current resource
levels and complaint volumes it is estimated that if AFCA receives complaints
from 1 July 2018, open complaints at the SCT will not be finalised until
December 2022.[195]
Item 32 of Schedule 3 provides that the repeal of
the Superannuation (Resolution of Complaints) Act by Part 1 of Schedule
3 does not affect a determination made under that Act before the commencement
of that Part. This is intended to provide certainty in relation to those
determinations made by the SCT, which will ‘continue to have the same legal
status and apply as if the amendments under Part 2 of Schedule 3 to this Bill
had not been made’. [196]
Right to a
fair trial
The Explanatory
Memorandum seeks to clarify that the proposed repeal of the Superannuation
(Resolution of Complaints) Act and the consequent abolition of the SCT, is
not intended to impact on the right to a fair trial for persons with a
superannuation complaint.[197]
The proposed amendments to Schedule 1 of the Bill are intended to safeguard
this right in the following way. It is proposed that the power of the Minister
to authorise an EDR scheme is subject to a requirement that in doing so, the
Minister must take into account, among other things, whether the EDR scheme
will operate as an accessible, fair, independent, accountable and efficient
scheme (proposed subsection 1051(4)).
Indeed, as the Explanatory
Memorandum points out:
the requirement to provide fair, efficient, timely and
independent dispute resolution is an ongoing requirement that AFCA must comply
with. Where AFCA does not satisfy this requirement, ASIC has a general
directions power that can be used to compel compliance.[198]
The SCT, as a statutory body, will continue operation for up
to an additional four years to resolve all legacy complaints. The legislation
also makes provision to allow FOS and CIO to continue operations for up to an
additional 12 months to resolve legacy complaints.
[1]. The
Ramsay Review refers to the independent review by Professor Ian Ramsay of
the financial system’s external dispute resolution and complaints framework
announced on 5 May 2016, by the Minister for Small Business and Assistant
Treasurer, Kelly O’Dwyer. See K O’Dwyer (Minister for Small Business and
Assistant Treasurer), New
independent expert panel, media release, 5 May 2016.
[2]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p. 3.
[3]. “APRA
is the prudential regulator of the Australian financial services industry. It
oversees banks, credit unions, building societies, general insurance and
reinsurance companies, life insurance, private health insurance, friendly
societies, and most of the superannuation industry. Its mandate is also to
develop prudential policies that balance financial safety and efficiency,
competition, contestability and competitive neutrality”. APRA, ‘About APRA’,
APRA website.
[4]. Reserve
Bank of Australia, ‘Australia's
financial regulatory framework’, Reserve Bank of Australia website.
[5]. Financial
Ombudsman Service Australia (FOS), Annual Review,
FOS website, 2017.
[6]. Credit
and Investments Ombudsman, ‘Annual
report on operations 2017’, CIO website, 2017.
[7]. FOS,
‘Dispute
resolution process in detail: Decision’, FOS website.
[8]. FOS,
‘What we do’, FOS
website.
[9]. Section
911A of the Corporations
Act 2001.
[10]. Corporations Act
2001, section 766A.
[11]. ASIC,
‘RG
165 Licensing: internal and external dispute resolution’, 2 July 2015.
[12]. See
ASIC’s ‘Regulatory
guide’ RG-165.87–RG-165.102 for further information on this requirement.
[13]. Ibid.
[14]. FOS,
‘About us’, FOS website.
[15]. FOS,
Terms of
reference, FOS website, 1 January 2010 (as amended 1 January 2015);
FOS, ‘How
FOS applies the monetary limit and compensation caps to claims’, FOS
website, 2012.
[16]. FOS,
Terms of
reference, op. cit., para. 5.1.
[17]. Ibid.,
para. 7.1.
[18]. Ibid.,
para. 9.
[19]. Ibid.,
para. 9.2; M Legg, ‘A comparison
of regulatory enforcement, class actions and alternative dispute resolution in
compensating financial consumers’, Sydney Law Review,38(3), 2016,
p. 311.
[20]. FOS,
Terms of
reference, op. cit., para. 8.8.
[21]. Ibid.,
para. 8.9.
[22]. ASIC,
‘ASIC
Regulatory Guide 139: Approval and oversight of external complaints resolution
schemes’, ASIC website, 13 June 2013.
[23]. Ibid.,
para. 11.2.
[24]. FOS,
Annual Review,
op. cit.
[25]. S
Letts, ‘Financial
Services Ombudsman complaints surge driven by insurance and credit card
disputes’, ABC News, 5 October 2017.
[26]. Ibid.
[27]. Credit and Investments Ombudsman (CIO), ‘About CIO’, CIO website.
[28]. CIO,
Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no. 15], p.
7.
[29]. Ibid.
[30]. Superannuation Complaints Tribunal (SCT), ‘About
the Tribunal’, SCT website.
[31]. Industry
Super Australia (ISA), Submission
to Treasury, Review of the Financial System External Dispute Resolution
Framework, 7 October 2016, pp. 2–3.
[32]. In
June 2014, a Senate inquiry into the performance as ASIC, which included a case
study examination of practices of Commonwealth Financial Planning Limited
(CFPL), part of the Commonwealth Bank of Australia Group (CBA), found that the
CBA was involved in malfeasance resulting in thousands of customers
experiencing significant financial loss, and recommended the Government ‘establish
an independent inquiry, possibly in the form of a judicial inquiry or Royal
Commission’ into the matters uncovered and raised by the inquiry in relation to the CFPL and CBA. See Senate
Economic References Committee, Final
report, Performance of the Australian Securities and Investments
Commission, The Senate, Canberra, 26 June 2014, recommendation 7, pp. xx
and 179.; S Ferguson, ‘Money
for nothing’, Four Corners, ABC, 7 March 2016; A Ferguson, ‘ASIC to investigate Commlnsure’, The
Australian Financial Review, 7 March 2016, p. 40; Parliamentary
Joint Committee on Corporations and Financial Services, Report,
Inquiry into the Impairment of Customer Loans, Parliament House,
Canberra, 4 May 2016, p. xi; P McConnell, ‘War
on banking’s rotten culture must include regulators’, The Conversation,
4 June 2015.
[33]. S
Lane, ‘Labor
takes aim at big banks, promising royal commission’, ABC1, 8 April
2016. In 2016, polling by Essential Media revealed that almost two-thirds of respondents
(64%) were in favour of a royal commission into banking and financial services,
see ‘Royal
Commission into banking’, Essential report, 16 August 2016.
[34]. For
example in the case of insurance, it has been argued that consumers may be
paying too much for a ‘bloated financial sector’: See I McAuley, ‘The
mounting case for a royal commission into banks and insurance companies’, New
Matilda, 21 September 2016; J Owens, ‘Labor
promises royal commission into the financial sector’, The Australian, 4 August 2016; B
Shorten (Leader of the Opposition), C Bowen Shadow Treasurer), M Dreyfus
(Shadow Attorney-General) and J Chalmers (Shadow Minister for the Arts), Labor
calls on the Turnbull Liberal Government to hold a Royal Commission into
misconduct in the banking and financial services industry, Press
Conference, transcript, Melbourne, 8 April 2016.
[35]. Lane,
‘Labor
takes aim at big banks, promising royal commission’, op. cit.; J Owens, ‘Labor
promises royal commission into the financial sector’, The Australian,
8 April 2016.
[36]. B
Shorten (Leader of the Opposition) et al., Royal
Commission into the Banking and Financial Services Sector, op. cit.
[37]. B
Katter, A
Royal Commission into banks should have begun a year ago, media
release, 9 April 2016.
[38]. The
Australian, ‘Morrison
slams Shorten’s call for royal commission into banks,’ The Australian,
8 April 2016.
[39]. S
Morrison (Treasurer) and K O’Dwyer (Minister for Small Business), Turnbull
Government bolsters ASIC to protect Australian consumers, joint media
release, 20 April 2016.
[40]. Ibid.
[41]. Ibid.;
M Grattan, ‘Morrison
warns banks not to pass on new “user-pays” impost to finance ASIC reform’, The Conversation, 20 April 2016.
[42]. Insurance
Business Australia, ‘ASIC
calls for new “user pays” funding model’, InsuranceBussinessMag.com,
9 April 2014. In late 2013 the Australian Government announced the appointment
of former CEO of the Commonwealth Bank, David Murray, to oversee a broad
inquiry into the Australian financial system. The 350-page final report was
released on 7 December 2014, making over 40 recommendations. The recommendation
for a user-pays funding model was included in that report. See D Murray, Financial
system inquiry: final report, The Treasury, November 2014, p. xxvi.
[43]. See
Murray, Financial
system inquiry: final report, op. cit.; J Durie, ‘User-pays
model for ASIC ’, The Weekend Australian, 16 May 2015, p. 35.
[44]. See
Murray, Financial
system inquiry: final report, op. cit. As set out above, in late 2013
the Australian Government announced the appointment of David Murray to oversee
a broad inquiry into the Australian financial system, in the aftermath of the
2008 global financial crisis. In general terms, the Murray Inquiry was charged
with laying out a blueprint to foster an ‘efficient, competitive and flexible’
financial system over the next decade. The 350-page final report was released
on 7 December 2014 and made 44 recommendations. Besides superannuation, there
were no specific recommendations about governance. However there was a deal of
discussion about the need to improve culture in financial institutions and an
emphasis placed on the conduct of organisational leaders in shaping and
determining organisational culture. There was also no significant
recommendations addressing the problematic issue of vertical integration - the structural
flaw that has driven most of the financial planning scandals. In simple terms,
the structural flaw in the financial system lies in the reality that the vast
majority of Australia’s financial planners are either employed by or aligned to
the big four banks and AMP. The report seemed to place some level of premium on
efforts to improve culture and obligations to act in the interests of
customers, as a means of mitigating the mis-selling risk that vertical
integration might otherwise pose. ‘In the vertically integrated model, the
institution gets fees and volume rebates from the financial planners for
selling the product, and they earn money from the administration of the
platform, and at the funds management level’. See A Ferguson, ‘Big
banks face up to inherent flaw’, The Sydney Morning Herald, 1
September 2014.
[45]. L
Sweeney and L Yabsley, ‘Malcolm
Turnbull backflips on banking royal commission after big four call for inquiry
to restore public faith’, ABC news, 30 November 2017.
[46]. P
Coorey and J Eyers, ‘Big
four bank chairmen back inquiry to end 'political uncertainty’, The
Australian Financial Review, 30 November 2017; D Gonski, S
Elliott, C Livingstone, I Narev, K Henry, A Thorburn, L Maxsted, and B Hartzer,
Letter from Australia's leading banks to Scott Morrison [regarding a Royal Commission into the banking and finance sector],
30 November 2017.
[47]. K
O’Dwyer (Minister for Small Business and Assistant Treasurer), New
independent expert panel, op. cit.
[48]. J
Mather, ‘PM's
tribunal plans dealt blow by experts’, The Financial Review, 6
December 2016; Association of Securities and Derivatives Advisers of Australia
Ltd (ASDAA), Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 25 September 2017, [Submission no. 1], p.
2.
[49]. K
O’Dwyer (Minister for Revenue and Financial Services), Review
of external dispute resolution and complaints schemes, media release,
8 August 2016; The Treasury, ‘Review
of the financial system external dispute resolution framework’, The
Treasury website.
[50]. K
O’Dwyer (Minister for Revenue and Financial Services), Review
of external dispute resolution and complaints schemes, op. cit.; The Treasury, Review
of the financial system external dispute resolution framework,
Supplementary issues paper, May 2017, p. 3; J Eyers, ‘Ramsay
gets more teeth for review’, The Australian Financial Review Weekend,
4 February 2017.
[51]. K
O’Dwyer (Minister for Revenue and Financial Services), External
dispute resolution framework issues paper released, media release,
9 September 2016; The Treasury, Review
of the financial system external dispute resolution framework, Issue
paper, The Treasury, 9 September 2016.
[52]. The
Treasury, Review of the financial system external dispute resolution
and complaints framework: interim report, The Treasury, Canberra, 6 December
2016.
[53]. The
Treasury, Review
of the financial system external dispute resolution framework, op.
cit., p. 3.
[54]. K
O’Dwyer (Minister for Revenue and Financial Services), Review
of external dispute resolution and complaints schemes, op. cit.; The Treasury,
Review
of the financial system external dispute resolution framework, op. cit.,
p. 3.; Eyers, ‘Ramsay
gets more teeth for review’, op. cit.
[55]. The
Treasury, Review
of the financial system external dispute resolution framework, op. cit.,
p. 3.
[56]. Ibid.
[57]. The
Treasury, Review of the financial system external dispute resolution and
complaints framework: final report, The Treasury,
Canberra, 3 April 2017, pp. 10–11.
[58]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p. 59.
[59]. Senator
J McGrath, ‘Second
reading speech: Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017’, Senate, Debates,
14 September 2017, p. 7318.
[60]. K
O’Dwyer (Minister for Revenue and Financial Services), Overhauling
the dispute resolution framework, media release, 26 July 2017.
[61]. K
O’Dwyer (Minister for Revenue and Financial Services), Putting
consumers first – improving dispute resolution, media release, 14
September 2017.
[62]. Ibid.
[63]. Senate
Standing Committee for Selection of Bills, Report,
11, 2017, The Senate, Canberra, 14 September 2017.
[64]. Senate
Standing Committees on Economics, Treasury
Laws Amendment (Putting Consumers First—Establishment of the Australian
Financial Complaints Authority) Bill 2017, The Senate, Canberra, 17
October 2017.
[65]. Ibid.,
p. 25.
[66]. Ibid.
[67]. Ibid.,
p. 27.
[68]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 12, 2017, The Senate, 18 October 2017, p. 63.
[69]. Senate
Standing Committee for the Scrutiny of Bills, ‘Ministerial responses’, Scrutiny
digest, 13, 2017, The Senate, 5 November 2017, pp. 145–159.
[70]. Ibid.,
p. 146.
[71]. Ibid.
[72]. Ibid.
[73]. Senate
Standing Committee for Selection of Bills, Report,
11, 2017, op. cit., pp. 64–5.
[74]. Attorney-General's
Department, A
guide to framing Commonwealth offences, infringement notices and enforcement powers,
September 2011, pp. 22–5.
[75]. Senate
Standing Committee for the Scrutiny of Bills, ‘Ministerial responses’, Scrutiny
digest, 13, 2017, The Senate, 5 November 2017, pp. 147–8.
[76]. Ibid.,
p. 150.
[77]. Senate
Standing Committee for Selection of Bills, Report,
11, 2017, op. cit., pp. 65–6.
[78]. Senate
Standing Committee for the Scrutiny of Bills, ‘Ministerial responses’, Scrutiny
digest, 13, 2017, op. cit., pp. 152–3.
[79]. Ibid.
[80]. Ibid.,
p. 154.
[81]. Senate
Standing Committee for Selection of Bills, Report,
11, 2017, op. cit., pp. 66–7.
[82]. Senate
Standing Committee for the Scrutiny of Bills, ‘Ministerial responses’, Scrutiny
digest, 13, 2017, op. cit., p. 155.
[83]. Ibid.,
p. 155–6.
[84]. Ibid.,
p. 155.
[85]. Ibid.,
p. 156.
[86]. Subsection
47(3) of the Retirement
Savings Accounts Act 1997 and subsection 101(2) of the Superannuation
Industry (Supervision) Act 1993 set out the relevant offences.
Section 4AA of the Crimes
Act 1914 provides that a penalty unit is currently equal to $210.
[87]. Senate
Standing Committee for Selection of Bills, Report,
11, 2017, op. cit., pp. 67–8.
[88]. Senate
Standing Committee for the Scrutiny of Bills, ‘Ministerial responses’, Scrutiny
digest, 13, 2017, op. cit., pp. 158–9.
[89]. Ibid.,
p. 159.
[90]. Ibid.
[91]. Senate
Standing Committees on Economics, Treasury
Laws Amendment (Putting Consumers First—Establishment of the Australian
Financial Complaints Authority) Bill 2017, op. cit., p. 28.
[92]. Ibid.,
p. 27.
[93]. Ibid.,
p. 28.
[94]. Ibid.,
p. 30.
[95]. Senate
Standing Committees on Economics, Submissions,
Inquiry into the Treasury Laws Amendment (Putting Consumers First–Establishment
of the Australian Financial Complaints Authority) Bill 2017, The Senate,
Canberra.
[96]. ASIC,
Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishing of the Australian Financial
Complaints Authority) Bill 2017, September 2017, [Submission no. 2], p. 2.
[97]. Ibid.
[98]. Ibid.
[99]. Ibid.
[100]. Credit
and Investments Ombudsman Ltd (CIO), Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no. 15], p.
13.
[101]. Australian
Bankers’ Association, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no. 13], pp.
1, 3.
[102]. Financial
Ombudsman Service Australia (FOS), Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, September 2017, [Submission no. 7],
p. 4; SMSF Association, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, September 2017, [Submission no. 31];
Westpac, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, September 2017, [Submission no. 10], p. 1.
[103]. Financial
Ombudsman Service Australia, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, op. cit., pp. 6‑7.
[104]. Australian
Lawyers Alliance, Submission
to Senate Standing Committee on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 28 September 2017, [Submission no. 17], p.
5.
[105]. Ibid.,
p. 6.
[106]. Ibid.
[107]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p. 62.
[108]. Australian
Lawyers Alliance, Submission
to Senate Standing Committee on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, op. cit., p. 7.
[109]. Ibid.
[110]. Ibid.,
p. 8.
[111]. Australian
Small Business and Family Enterprise Ombudsman (ASBFEO), Submission
to Senate Standing Committee on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no.
26], p. 1.
[112]. Ibid.
[113]. Ibid.
[114]. Ibid.,
p.2.
[115]. Consumer
Action Law Centre and others, Submission
to the Senate Standing Committees on Economics, Inquiry into the Treasury
Laws Amendment (Putting Consumers First–Establishment of the Australian
Financial Complaints Authority) Bill 2017, 29 September 2017, [submission
no. 9], pp. 4–9. In contrast to this view, ASIC’s own submission to the Ramsay
Review recognised that there was a lack of evidence of consumers being ‘shopped
around schemes or potentially never getting to the scheme that can help them’.
See Australian Securities and Investments Commission, Submission
to the Review of the financial system external dispute resolution framework,
Issues paper, October 2016, p. 41; ASIC, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, September 2017, [Submission no. 2].
[116]. Consumer
Action Law Centre and others, Submission
to the Senate Standing Committees on Economics, Inquiry into the Treasury
Laws Amendment (Putting Consumers First–Establishment of the Australian
Financial Complaints Authority) Bill 2017, op. cit., pp. 4–9.
[117]. Council
for Small Business Australia, Submission
to the Senate Standing Committee on Economics, Inquiry into the Treasury
Laws Amendment (Putting Consumers First–Establishment of the Australian
Financial Complaints Authority) Bill 2017, 29 September 2017 [submission
no.24], p. 1.
[118]. Insurance
Council of Australia, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no. 19] p. 1.
[119]. Ibid.,
p. 2.
[120]. Financial
Services Council, Attachment 1 to Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 14 June 2017, [Submission no. 20] p.
2.
[121]. ASFA,
Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no. 21] p.
3.
[122]. Ibid.
[123]. Ibid.
[124]. Mortgage
and Finance Association of Australia, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 28 September 2017, [Submission no. 5], pp.
2–3; Australian Collectors and Debt Buyers Association, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 28 September 2017, [Submission no. 3], p.
5; Association of Securities and Derivatives Advisers of Australia (ASDAA), Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, op. cit., p. 2; Commercial Asset Finance
Brokers Association of Australia (CAFBA), Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 28 September 2017, [Submission no. 22], p.
2; National Insurance Brokers Association, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 28 September 2017, [Submission no. 18], p.
2.
[125]. CIO,
Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no. 15] p.
2.
[126]. Ibid.
[127]. Ibid.,
p. 5.
[128]. Ibid.,
p. 3.
[129]. Ibid.
[130]. Ibid.,
p. 4.
[131]. Ibid.,
p. 23.
[132]. CPSU,
Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 2 October 2017, [Submission no. 25] p. 2; CIO,
Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, op. cit., pp. 7–8; ACTU, Submission
to Senate Standing Committee on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission
no. 29], p. 1; Financial Sector Union, Submission
to the Senate Standing Committee on Economics, Inquiry into the Treasury
Laws Amendment (Putting Consumers First–Establishment of the Australian
Financial Complaints Authority) Bill 2017, 3 October 2017 [submission
no. 12], p. 1.
[133]. CPSU,
Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, op. cit., p. 2.
[134]. Ibid.
[135]. Ibid
[136]. Ibid.
[137]. Ibid;
CIO, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, op. cit., p. 1.
[138]. Financial
Sector Union, Submission
to the Senate Standing Committees on Economics, Inquiry into the Treasury
Laws Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, op. cit., p. 2; Australian Institute of
Superannuation Trustees, Submission
to Senate Economics and Legislation Committee, Inquiry into the Treasury
Laws Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no. 6], p.
3.
[139]. Financial
Sector Union, Submission
to the Senate Standing Committees on Economics, Inquiry into the Treasury
Laws Amendment (Putting Consumers First–Establishment of the Australian
Financial Complaints Authority) Bill 2017, op. cit., p. 1.
[140]. Ibid.
[141]. CPSU,
Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, op. cit., p. 3.
[142]. Ibid.,
p. 2; Financial Sector Union, Submission
to the Senate Standing Committees on Economics, Inquiry into the Treasury
Laws Amendment (Putting Consumers First–Establishment of the Australian
Financial Complaints Authority) Bill 2017, op. cit., p. 1.
[143]. CPSU,
Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, op. cit., p.3; ACTU, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, op. cit., p. 2; Association of
Superannuation Funds of Australia, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no.
21], p. 4.
[144]. CPSU,
Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, op. cit., p.3.
[145]. Ibid.,
p. 4.
[146]. Association
of Superannuation Funds of Australia, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, op. cit., p. 6.
[147]. Superannuation
Complaints Tribunal, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no. 14],
p. 7.
[148]. Ibid.
[149]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p. 3.
[150]. Ibid.
[151]. The
Statement of Compatibility with Human Rights can be found at pp. 57–8 of the Explanatory
Memorandum to the Bill.
[152]. Parliamentary
Joint Committee on Human Rights, Report, 11, 2017, The Senate,
17 October 2017, p. 60.
[153]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p. 65–6.
[154]. ANZ,
Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First–Establishment of the Australian Financial
Complaints Authority) Bill 2017, September 2017, [Submission no. 30], p. 2.
[155]. Since
1998, ASIC has played a lead role in setting and applying standards in the
financial services EDR sector. In its submission to the Senate Inquiry into
this Bill, ASIC pointed out that currently, ASIC has ‘the legislative power to
approve and oversee the operation of industry-based EDR schemes (dealing with
all non-superannuation related consumer disputes) and key mandatory reforms
that were initiated by ASIC during this period include:
- requiring schemes to operate
independently of the industry sectors that funded them
-
introducing a requirement that
approved schemes, identify, deal with and report systemic issues and serious
misconduct to the regulator and
-
formalising the requirement to hold
reviews on a regular basis’.
ASIC,
Submission to
Senate Selection of Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, September 2017, [Submission no. 7], p. 1.
[156]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p. 16.
[157]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p.17.
[158]. ANZ,
Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, September 2017, [Submission no. 30], p. 2;
Australian Bankers Association, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, September 2017, [Submission no. 13], p. 3.
[159]. ASIC,
Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, op. cit., p. 3.
[160]. ANZ,
Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, op. cit., p. 3.
[161]. Australian
Institute of Superannuation Trustees, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no. 6,] p.
3.
[162]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p. 18.
[163]. Australian
Lawyers Alliance, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, op. cit., p. 9.
[164]. Financial
Planning Association of Australia, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no. 8], p.
1.
[165]. Australian
Small Business and Family Enterprise Ombudsman, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission
no. 26], pp. 2–3.
[166]. Australian
Lawyers Alliance, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws Amendment
(Putting Consumers First—Establishment of the Australian Financial Complaints
Authority) Bill 2017, op. cit.
[167]. Australian
Small Business and Family Enterprise Ombudsman, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First —Establishment of the Australian Financial
Complaints Authority) Bill 2017, op. cit., pp. 2–3.
[168]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p. 18.
[169]. Section
15AB of the Acts
Interpretation Act 1901 (Cth) provides for the use of extrinsic
material in the interpretation of an Act (to confirm where a provision is
ambiguous or obscure) so that use may be made of the explanatory memorandum
relating to the Bill containing the provision, or any other relevant document,
that was laid before, or furnished to the members of, either House of the
Parliament by a Minister before the time when the provision was enacted.
[170]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p. 21.
[171]. Ibid.,
p. 22.
[172]. Credit
and Investments Ombudsman Ltd (CIO), Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, op. cit., p. 4.
[173]. Proposed
section 1056 provides further limitations on when a superannuation
complaint may be made to AFCA in relation to a decision about the payment of a
death benefit.
[174]. Section
4AA of the Crimes
Act 1914 provides that a penalty unit is currently equal to $210. This
means the maximum penalty is currently $6,300.
[175]. Australian
Small Business and Family Enterprise Ombudsman (ASBFEO), Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no. 26], p.
3.
[176]. Section
4AA of the Crimes
Act 1914 provides that a penalty unit is currently equal to $210. This
means the maximum penalty is currently $6,300.
[177]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p. 38.
[178]. Australian
Lawyers Alliance, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First —Establishment of the Australian Financial
Complaints Authority) Bill 2017, 28 September 2017, [Submission no. 17], p.
8.
[179]. Ibid.
[180]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p. 33.
[181]. Superannuation
Complaints Tribunal, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no. 14], p.
7.
[182]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p. 42.
[183]. Ibid.,
p. 44.
[184]. Superannuation
Complaints Tribunal, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no. 14] p.
7; Financial Sector Union, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no. 12] p. 1;
CPSU, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, 2 October 2017, [Submission no. 25], pp. 2–3;
Australian Institute of Superannuation Trustees, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no. 6], p. 9.
[185]. Section
47 of the RSA
Act imposes a duty on RSA account providers to establish arrangements
for dealing with inquiries or complaints by holders, or former holders, of an
RSA, or the executor or administrator of the estate of a former holder of an
RSA.
[186]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p. 49; Ramsay
Review, Final
report, op cit., p. 185.
[187]. The
Treasury, ‘Terms
of reference: Ramsay review’, 5 May 2016.
[188]. The
Treasury, Review of the financial system external dispute resolution and
complaints framework: final report, op. cit., p. 187.
[189]. Ibid.,
p. 186.
[190]. Ibid.
[191]. Ibid.,
p. 187.
[192]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p. 3.
[193]. Section
11, Superannuation (Resolution of Complaints) Act 1993.
[194]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p. 47.
[195]. Superannuation
Complaints Tribunal, Submission
to Senate Standing Committees on Economics, Inquiry into the Treasury Laws
Amendment (Putting Consumers First—Establishment of the Australian Financial
Complaints Authority) Bill 2017, 29 September 2017, [Submission no. 14], p.
2.
[196]. Explanatory
Memorandum, Treasury Laws Amendment (Putting Consumers First—Establishment
of the Australian Financial Complaints Authority) Bill 2017, p. 48.
[197]. Ibid.,
p. 58.
[198]. Ibid.
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