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AFCA amends rules following court judgment

22 January 2021 — 1 minute read

Following a recent judgment, the Australian Financial Complaints Authority has amended its rules to provide clarity on its ability to deal with complaints where the advice was given outside the authority of the adviser’s licensee.

In a public update, AFCA said it has amended its rules to provide clarity for consumers and financial firms regarding AFCA’s jurisdiction to receive complaints about the conduct of an authorised representative of an AFCA member. 

The change to the rules is in response to a legislative instrument issued by ASIC on 5 January 2021 requiring AFCA to update its rules.


“The rules change follows the judgment of the NSW Supreme Court in DH Flinders Pty Limited v Australian Financial Complaints Authority in November 2020. This case related to AFCA’s jurisdiction to consider a complaint against a licensee in relation to the conduct of its corporate authorised representative, specifically where the conduct of the representative was without or outside authority,” AFCA explained.

“The judgment highlighted that AFCA’s Rules needed to be clearer to ensure that they reflected the same obligations and liabilities for licensees as set out in the Corporations Act.

AFCA stated that the rules now clearly reflect the same statutory liability for licensees regarding their authorised representatives as set out in the Corporations Act and the National Consumer Credit Protection Act.

The new rules apply to complaints received by AFCA from 13 January 2021 onwards, it said.

“Complaints received before 13 January 2021 will be handled by AFCA under the previous rules. As the vast majority of complaints AFCA considers are between parties with a direct relationship [such as] a bank to a bank customer, these complaints are not impacted by the rules change,” it said.

AFCA stated that it is currently reviewing a very small number of complaints received before 13 January 2021 which are potentially impacted by the judgment and is in contact with those complainants and financial firms to discuss the specifics of their complaint.  

“For the small number of complaints which may be outside AFCA’s Rules, AFCA will be encouraging the financial firms involved to consent to AFCA considering the complaint to achieve an early resolution and avoid the prospect of potential court or other action by the complainant,” it said.

AFCA amends rules following court judgment
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