Australian Financial Complaints Authority (AFCA) 

Statutory basis: Corporations Act 2001 (Cth) Pt 7.10A.¹

Established: operating since 1 November 2018, replacing three earlier schemes (the Financial Ombudsman Service, the Credit and Investments Ombudsman, and the Superannuation Complaints Tribunal).

What kind of body is it? This is the detail most easily gotten wrong: AFCA is not a government agency, a court, or a body created directly by statute. It is a company that the Minister has authorised (s 1050) to operate the single external dispute resolution scheme, the AFCA scheme, which a financial services licensee providing services to retail clients must belong to (s 912A(1)(g), (2)(c)) and which a credit licensee must belong to (s 47(1)(i) of the National Consumer Credit Protection Act 2009 (Cth)). Calling AFCA "the Commonwealth's financial ombudsman" captures its function reasonably well; calling it "a statutory corporation" is the specific error to avoid.

What AFCA does

AFCA hears individual complaints from consumers and small businesses against a member financial firm (banks, insurers, superannuation trustees, financial advisers and credit providers), and can make a determination. For most complaints a determination is binding on the firm if the complainant accepts it, and the complainant is not bound — they remain free to reject it and go to court instead. That one-way binding effect is a deliberate design feature, not an oversight.

Superannuation complaints are the exception, and it is not a small one. These are decided under Part 7.10A of the Corporations Act 2001 (Cth) rather than under the scheme's contractual terms. Section 1055(1) gives AFCA all the powers of the trustee or insurer whose decision is complained of, and s 1055(6) lets it require a party to repay money, set aside or vary the terms of a policy, and vary the governing rules or cancel membership in their application to the complainant — orders that operate on the complainant, not only on the firm. A party's only recourse is an appeal to the Federal Court on a question of law, within 28 days (s 1057). So a superannuation determination binds both sides, and "I simply will not accept it" is not available.

How it relates to the other Commonwealth bodies

AFCA resolves individual disputes; it does not supervise financial soundness (that is APRA's role) and it does not administer or enforce the broader licensing and conduct rules that make membership of an EDR scheme mandatory (Parliament made those rules in the Corporations Act, and administering and enforcing them is ASIC's role). A single bad experience with a bank is AFCA's territory; a systemic failure across the industry is more likely to draw ASIC or APRA attention instead.

Self-check

• Have I described AFCA as a Minister-authorised scheme operator, not a government agency or a statutory corporation?
• Have I stated that AFCA determinations bind the firm if accepted and do not bind the complainant — and carved out superannuation complaints, where Part 7.10A makes the determination bind both parties, appellable only on a question of law?
• Have I distinguished AFCA's individual-dispute role from APRA's and ASIC's systemic regulatory roles?