Banking consumers, your life is about to get a whole lot easier

The sometimes laborious process of going to your financial ombudsman when you’ve been shortchanged by your financial provider is set to be replaced by a one-stop complaints shop for Aussie banking consumers.

Legislation was introduced this week to form the Australian Financial Complaints Authority (AFCA) which will not only replace the Financial Ombudsman Service, but also replace the Credit and Investments Ombudsman and Superannuation Complaints Tribunal.

The Australian Bankers Association has come out in support of the scheme, with Chief Executive Anna Bligh stating that she believes AFCA will “simplify” the complaints procedure for Aussie consumers.

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“External dispute resolution is an important alternative to the court system as it is free for customers to use and doesn’t require formal legal representation. The new complaints body is a win for customers and will help people have confidence that their disputes will be heard as efficiently and quickly as possible,” she said.

Aside from combining a number of financial complaints avenues under the one roof, AFCA will also have more power to rule over larger disputes and have the authority to dish out some serious compensation for consumers.

Under the proposed legislation, if you have a dispute regarding a value of money up to $1 million you’ll be able to take it up with AFCA and could receive as much as half a million dollars in compensation, which is almost double the existing limits.

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The good news isn’t just isolated to individual consumers, however. Small business owners will be able to lodge a complaint with AFCA if they have an issue with their credit facility as long as it is worth less than $5 million and could be compensated up to a cool $1 million.

The Australian Financial Complaints Authority is set to up and running in July of next year, but in the meantime check out Mozo’s top tips for when you have a problem with your financial provider.

Mozo’s top tips for financial complaints

• Make initial contact with your provider: If you’re not happy with a service then you can either call, email or visit your provider in person and explain your complaint.
• Make a formal complaint: If you’re not satisfied with the response, it is time to register a formal complaint and it is best to do this in writing. Make sure you include your name, contact details and the date as well as any copies of relevant documents.
• Contact your financial ombudsman: If you’re still unhappy with your provider’s response it is worth contacting your financial ombudsman. Make sure you explain that you’ve gone through the aforementioned avenues and try your best to remain calm when conveying the problem.